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This doesn't come a huge surprise. Since a consumer could buy a kindle, 2 kindle touches, and a kindle fire (or some combination) for the same prices a the lowest model iPad. These prices are going to make kindle products really popular for gifts during the holiday season. I think they are going to do extremely well.
Amazon will soon be the Nokia of tablets and eReaders. Not fancy, but cheap.
Nokia produced the best mobile phones back in the day, solid quality and fair price. They just missed the smartphone trend and when they still could get back they refused to be mere "hardware-producers" and out of pride they didn't cooperate with Android.

So in no way Amazon and Nokia are comparable.

The only thing I don't like about the Kindle Fire is that (although Android is used) the Android-Market will not be useable

I'm actually glad the Fire won't have the Market on it. Presuming it does sell like hotcakes; the Fire (and any related Amazon devices) becomes incentive for Google to ensure that Android stays open. Forcing a fork (by closing the source) would shatter the Android developer community; bigger devs have to use more resources to stay compatible with both sides, smaller ones have to choose a side, and some would decide to leave altogether for a more stable platform. Even if Google "won" the fork, they can't afford to send developers away.

Flip side, there's the possibility that this is exactly the scenario Amazon is hoping for.

I would be interesting to do this survery at the start of december , after some 5 million(or more) people would get their pre-ordered kindle fire and use it, talk about it and show it to their friends.
Personally I prefer a refurbished iPad 1. I can get one for $250-$300 online.
Don't see why you got down voted. It's a valid opinion. Speaking as someone with an iPad and iPad 2 (both of which I love) they're a tad heavy for reading in bed. So are thick paperbacks, but the Kindle and Kindle Fire might just win on this factor alone.
I use my iPhone 4S as an e-reader before going to sleep. my iPad 2 for the rest of the day. my 4 year old son is using our old iPad 1 and he loves it.
Speaking as someone who pre-ordered the original iPad, has an iPad 2, has bought iPads for everyone in the family, and loves the iPad -- I preordered a Kindle Fire.

The funny thing is that the iPad started out as a media consumption device but rapidly became a pretty decent all-round device (it doesn't replace a "real" computer but it sure reduces the need to have one around), but it's still 1.5lb and quite big for, say, reading in bed. I prefer reading an iPad to reading a book (I'm reading Clash on Kings in paperback right now, and almost wishing I'd paid -- double -- for the Kindle version) but I'd prefer reading something as small and light as a Kindle to an iPad if it had a color backlit display. (I'd have bought a color Nook if they could play Kindle books.)

Oh look, the Fire has a color backlit display.

The nook reads kindle books just fine with the right calibre plugins.
If it has the right software and is easy enough to use, I can see this happening. Given the choice between a $400 iPad and a $200 Kindle Fire I think I can see a lot of people taking the cheaper option.

Whether it is sustainable will depend on the performance/usability of the Kindle. The problem with current iPad competitors is that at best, they come in at the same price point as the iPad and fall far short in terms of usability.

The cheapest iPad 2 is $499. Are you talking about the one year old iPad?
You can find refurbished iPad 1s online for $250-$300.
Considering the iPad has been on sale for the last 2 years and have already sold millions, I don't find this surprising since the Kindle Fire just went on sale.

Now if Apple had released a iPad 3 at the same time as the Kindle Fire was released for pre-order, that would be more surprising.

Makes sense to me. I was already looking into buying a Kindle Fire for my mom. Don't have the money for an iPad.
Seth Meyers nailed it:

"In an effort to compete with the iPad, Amazon Wednesday unveiled their new tablet computer called the Kindle Fire which will retail for $199. It’s expected to sell well among parents who always buy the wrong thing."

It looks like a decent tablet and it's $200, what's not to like? I'd rather have an iPad but there is a good chance I'll pick up a Fire based on the "bang for your buck" factor.
"CEO Tim Cook reportedly thinks further Android fragmentation brought about by the Kindle Fire will drive consumers to the iPad."

Fragmentation, eh? That's what Apple thinks will be the downfall of Android tablets?

I wonder if the following was ever said about Apple in the past:

CEO Steve Jobs reportedly thinks that further PC fragmentation brought about by yet another PC maker will drive consumers to the Mac.

> I wonder if the following was ever said about Apple in the past?

Probably not, but these are different markets, and Apple is in a drastically different position.

I don't own a crystal ball, and I try not to pretend I do, but I do like to play devil's advocate, so I'll take the opposite position here and say that fragmentation does matter in the post-PC market because Apple managed to define the segment, first with the iPhone and followed it up with the iPad.

With the iPhone and iPad, consumers who are used to the traditional PC computing experienced were introduced to a closed-loop vendor relationship. For all the warts that we (geeks) see, this is a fantastic experience for many consumers.

Case in point: this last week, I was in Ohio (I live in Florida). I had a problem with my MacBook Pro, and I had none of the things I needed to fix it. I used the Apple Store app to schedule a Genius appointment, dropped my laptop off, had lunch, and walked out of the store with a fully functional laptop, all within the span of a couple hours. My partners now take this level of service for granted. We recently switched to all Apple equipment after very positive experiences with iPhones and iPads.

When you contrast this to the typical PC vendor relationship, there are stark contrasts:

* Where do I take my Dell/HP/Acer computer to be repaired?

* When I call Dell/HP/Acer, what is the experience like?

* What are the costs associated with the repair?

In the case of Apple, it's Apple, Apple, and (often) zero. I have AppleCare on my MacBook Pro, but as it turns out, it didn't matter. Apple will perform simple software fixes at the Genius Bar for free, even if you're not covered by warranty. Are there cases where it would have cost me money? Plenty, but there wouldn't be any confusion over who I need to talk to. This leads to a high level of satisfaction [1].

Fragmentation has a significant impact on the consumer experience. "Android" has become a brand, but there is no consistency in revision, manufacturer, or expectation of service. All of these lead to open questions and insecurities in the minds of consumers. As the price of the device and term of commitment extends in to hundreds of dollars and multiple years, the opportunity for a negative experience compounds. Next thing you know, Uncle Dave is standing in the Verizon store frustrated because the counter clerk doesn't know why all his email account won't work with his phone. Why can't he run the app he just downloaded from the internet? When will updates be available for his phone? Lot's of open questions.

1 - http://www.engadget.com/2011/09/09/apple-tops-j-d-power-cust...