The Kindle is OK at being a book reader. I wouldn't say it's great at it. The iPad is in fact great at it.
A lot of Kindle users would beg to differ. It has a very readable screen that is day on the eyes, is lightweight and portable, lasts a long time on a charge, delivers content remotely without having to pay for a data connection - all very useful features and what Kindle users I know like about the device. Add color and the ability to play movies and you've notched it up a lot - all at a fraction of an iPad's price.
The iPad is also great at thousands of other functions and uses. The Kindle is not.
However, many of those other uses are irrelevant to most users. Just because something can do something doesn't mean that feature is desirable.
Today, I don't think there is much room for dedicated stand alone products. We are in the area of do-everything products....which will continue until certain technologies and parts become cheap....at which point we'll return to one product/one function.
I disagree - do everything products often sacriface the ability to all things well in order to do everything. The iPad is great, but its size, weight, and battery life are tradeoffs it made to be a good product. For many users, the ability to do more than a color Kindle does not justify the added cost. provide the desired functionality at a compelling price and you will have a hit product - Amazon may just have that with a color Kindle.
Even so, the Kindle has the potential to be more than just an eReader / video player. The Amazon App store is a bit of a game changer for the Kindle since it enables adding features and capabilities. Add in 3/4G at the current rate structure and it could be even more compelling; especially if you can check emails, sync with exchange server, browse the web - all for a fraction of an iPad. It won't be as powerful, but that wouldn't matter to many people.
To me, the real question is "can Amazon cook up a revenue sharing deal with carriers to keep the current Whispernet pricing model and get more video content from major studios to stream?" If so, they may well revolutionize the way tablets are viewed by the average person. Get the content mix right, and a Kindle with HDMI out starts to become a viable alternative to cable.
Consider this - Amazon pretty much knows the demographics and buying habit of every Kindle customer. How valuable is that to an advertiser and how willing would people be to view a short ad in order to see the current HBO hit "brought to you by Widget Industries" for free? Amazon could even store info on what ads you saw so if you wanted more information or to buy you can visit Amazon.com and whip out the plastic. Amazon already has an ad supported Kindle so they have some data on how consumers react to such a model and no doubt are looking how they can expand that model to deliver value and get people to spend more at Amazon.
