The trend I have personally seen is Parents buying the iPad for themselves but buying the Kindle Fire for their child. Being smaller, the Fire is easier to hold in the child's hands. The screen size with it's smaller finger target is no problem for a child's digits. The price is much easier to justify for such sophisticated technology.
I talked to one such parent recently and he explained that while he thinks the iPad is superior in just about every way, he couldn't even consider another $500 purchase for a Christmas gift for an 8-year old. The $199 was easier to swallow. Apps are cheap for the Fire, too. And he liked the fact that, because he is an Amazon Prime member, his son can stream movies and TV shows over wi-fi for free with the annual plan from Amazon.
Is it as fluid as an iPad? No. There are great limitations when comparing the two. However, the Fire software will continue to improve and become a better and better value, especially at the $199 price point.