Amazon waded into the tablet market today , announcing the $199 Kindle Fire . The Fire is a 7-inch tablet running a custom Android OS. Amazon has started taking pre-orders and will ship the device in mid-November.
The Fire appears positioned to appear as the high-end version of the existing Kindles, so it will not take on the iPad’s 10-inch form factor directly. However, with its $199 price point, and with the massive content delivery power of Amazon, the Fire could take a lot of sales away from Apple this holiday season. Apple will probably counter that the Fire is an inferior device, but I see a big segment of the population who would jump on this device quickly. Depending on the success of the Fire, we may see a 10-inch version optimized for magazine delivery down the road.