When you look at this, you will ask yourself, how can Amazon afford to sell such a device at $199? The answer is, they can't. They make a loss of around $40 for each device sold. There are two reasons for this. One is that there is absolutely no way to match the $499 iPad 2 unless the price is half of it, because the iPad has already solidified its position as THE tablet to get. Another reason is that they will try to make money back from selling content. For starters, this device will only have access to Amazon's Appstore, and not the Android Market! Amazon will also offer Kindle books, magazines, music, movies etc. -- all stored via Amazon Cloud Storage.
Essentially, it's a tablet that also promotes all of Amazon's services, just like how the iPad also buys its content from the Apple Appstore, iTunes for music and movies, and iBooks - exempt the iPad 2 is twice as expensive (although having a larger display, more powerful processor, etc etc etc)
Companies like HTC, Samsung, Toshiba etc have all produced tablets. They have all failed. Why will Amazon be the first real competitor? Because they know how to punch the iPad where it hurts. None of these other companies have priced their tablets less than $499, and that itself is fundamentally flawed. The Fire is not only cheap, but it integrates well with the Amazon ecosystem, and will try to make money off content rather than the device itself.
The only real risk that Amazon faces is if people start installing CyanogenMod on their Fires and regain access to the Android Market and stop buying Amazon content. Then they'll be selling these guys at a loss and getting no returns. However, looking at the general intellect of the most Kindle users today, I don't think this will pose a major problem.
Any of you guys getting one? At $199, it's pretty tempting for sure.
