Let's be honest, people love the iPad (a media tablet) because it's reasonably priced and it allows users to purchase and enjoy media in a very simple (Steve Jobs would say magical) way. And let's be honest on another score: People haven't taken to the recent spate of Android tablets because they're overpriced, have too few compatible apps and there's simply no seamless media and billing ecosystem integrated with them.
Amazon's Fire Tablet seems clearly positioned as a very real iPad contender because it delivers on both price and ease-of-use in the purchasing and consuming of media. What tablets like the Motorola Xoom and Samsung's Galaxy Tab have been missing is exactly what Amazon has spent years building, which is a backend of content and services that are ready to enable a no-brainer out-of-the-box experience for consumers.
To put it plainly, previous Android tablet entrants just haven't been able to reproduce Apple's plug-and-play experience. Arguably, Amazon just did.
While Amazon made a big deal about the Fire running Android apps, it made almost no mention of the platform itself. Amazon wants the Fire to be seen as an Amazon device that's connected to Amazon's content and cloud. This is something special, appears to be the intended message, maybe even "magical," and we're giving it to you for only $199 ($300 cheaper than the low-end iPad). And good for Amazon; the last thing it wants is for the Fire to be lumped in with the herd of pricey, lackluster Android tablets out there.
Amazon already has announced that sales of Kindle eBooks have eclipsed sales of physical books, so these extremely low device prices are surely aimed at selling more content. But I wonder how that will translate to revenue. While Apple obviously sells a lot of content through iTunes, content is only a small fraction of the company's total business. The lock-tight iTunes content model is there to sell more hardware, not the other way around. Regardless of whether there's a camera on the Fire, $199 is still cheap and I have to wonder how much Amazon is making per device.
The iPad aside, in the end it will be trial by fire (yuck, yuck) for Amazon's new tablet. It's smaller than the iPad and probably not quite as work-friendly as the iPad has proved to be on the enterprise side of things. I'm guessing that Amazon will sell a lot of these, but it's not going to be to the executives of Fortune 500 companies; it's going to be to consumers who want a small slate device that will act as a gateway to Amazon's content.