Kindle Fire: No big threat to the iPad, but should sell well

Amazon’s Kindle Fire is what everyone expected: A small tablet, mostly for consuming media, watching video, playing games, reading Kindle e-books, browsing the web, and goofing around in apps. It is also cheaper than expected, at $199 — less than half the price of Apple’s iPad.

There are some nice touches, like the “Silk” web browser, which does some of the page-crunching in the cloud, so web pages should theoretically load faster. And the software actually looks decent. Amazon isn’t screwing around.

So: How big of a threat is the Kindle Fire to the iPad?

I don’t see the Kindle Fire significantly disrupting Apple’s iPad business. I think both devices will sell well, and can easily coexist. I don’t think Apple will have any trouble finding iPad buyers, and I think the $199 price tag will attract many people to the Kindle Fire.

For now, the Kindle Fire isn’t as useful of a device — it’s a simple entertainment pad, whereas the iPad is already shaping up as the PC of the future. They will probably attract different buyers, and right now, the market is so small and nascent that there is easily room for both of them. Some people may buy a Kindle Fire instead of an iPad, but many others will want the richer iPad experience, and some may buy both and use them for different things.

Looking forward, we’ll have to see how much Amazon can do with the Kindle Fire software platform — both the OS and app ecosystem — and how tablet pricing shakes out.

My hunch is that Apple will remain well ahead of Amazon in software, hardware, and ecosystem, and therefore the iPad will continue to be the “premium” tablet indefinitely. Amazon may help force Apple to lower entry-level iPad prices, and Apple may even have to make a smaller iPad someday. But Amazon is not likely to take over Apple’s spot at the top of the tablet market.

Bottom line: The Kindle Fire isn’t much of an iPad threat yet. The real trouble will be for companies like Barnes & Noble, RIM, and Samsung, which are trying to sell 7-inch tablets that either cost considerably more or have poorer content and apps ecosystems.

Also: 500 days with the iPad