With its $199 price point and vast content ecosystem, Amazon’s Kindle Fire tablet seems the first real challenger to Apple’s iPad juggernaut. But it’s likely not a direct threat.
“While Amazon’s price point, installed base, digital content and cloud ecosystem will attract a certain consumer demographic to the Kindle Fire, there is still no real competitor to the iPad 2,” Ticonderoga analyst Brian White said in a note to clients today. “Essentially, we believe the Kindle Fire addresses a different market than the iPad 2, a tablet-light user on a tight budget that may not have yet purchased a tablet or already use a Kindle. … It’s hardly an iPad killer.”
Nor does Amazon intend it to be one. As CEO Jeff Bezos said in a message to customers Wednesday, there are two approaches to the tablet market, and both can work. Apple has chosen one (feature-rich, powerful, high-end hardware tightly integrated with a formidable content ecosystem) and Amazon the other: (spartan, feature-limited hardware tightly integrated with a formidable content ecosystem).
With the launch of the Fire, Amazon has a good chance at splitting the tablet market in two and dominating its lower end. Folks in the market for a $500 tablet will likely still look to the iPad. But if that price is too dear, $200 for the Fire is a compelling proposition.
And that’s ugly news for other tablet makers, because at $199, Amazon has really just ruined their pricing.
With rushed-to-market hardware, comparatively weak app ecosystems and mediocre content offerings, what will companies like Research In Motion, Samsung and Motorola do now? Come Nov. 15, there will be two tablets on the market — one at the high end, the other low — and they won’t be able to compete with either of them.
This article originally appeared on All Things Digital.