I posted a comment yesterday that I thought deserved a spot here on the main page. Regarding the Kindle Fire, longtime reader rbj asked, “I’m still happy with my HP TouchPad. Why doesn’t Amazon license or buy it from HP? It’s just sitting on a shelf over there.”
That’s pretty much exactly what Amazon did. Amazon’s goal was to hit that magic $199 price, so they took a BlackBerry PlayBook and stripped it of pretty much everything (cameras, memory, hardware volume controls, etc) but its eye-pleasing 7-inch screen. Then they loaded it up with an obsolete version of Android (2.3), and prettied it up with their own UI and uglied it up with The World’s Worst Web Browser™.
Amazon loses a couple bucks on every sale, but makes it up with volume Amazon Prime subscriptions. More importantly, Amazon disintermediates Apple’s iTunes Store from many people’s content-buying process.
That’s the key: Don’t think of the Kindle Fire as a competitor to the iPad; Think of it as a competitor to the iTunes Store.
Jeff Bezos is nobody’s fool.