iPad, meet your first serious competition

Expect Amazon.com's $199 Kindle Fire to vault to No. 2 in the crowded tablet market

Finally, a company other than Apple that gets the tablet market.

Amazon.com on Wednesday unveiled its long-awaited tablet computer, the Kindle Fire. And it's going to eat into Apple's market share, perhaps in a significant way.

Now, what makes Amazon think it can do what Research in Motion, HP and several makers of Android-powered tablets (such as Samsung) haven't been able to do?

Simple. Other manufacturers -- at least initially -- foolishly priced their tablets identically to the iPad. Guess what? It didn't work.

And how could it? The other tablets lacked many of the iPad's features and offered not nearly as many apps, particularly HP's TouchPad and RIM's BlackBerry PlayBook. Yet they apparently figured that consumers were dumb or inattentive enough to not notice or to be swayed by marketing.

We all know what happened. The iPad has managed to retain anywhere from 75% to 80% of the tablet market, depending on who's counting.

Amazon, in contrast, is offering the 8GB Kindle Fire at $199. That's $300 less than the 16GB iPad 2. Yes, the Kindle Fire has half the storage of the lowest-priced iPad, but the price point is going to be attractive to many tablet shoppers who are willing to give up storage they really don't think they need in return for a bargain price.

Of course, Amazon also offers tablet shoppers more than a good price point. As IDG News Service points out:

Amazon offers 100,000 movies and TV shows through its instant streaming service via deals with CBS, NBC Universal, Sony, and Warner Bros. On Monday, Amazon and Fox forged a deal to deliver TV shows and movies through Amazon's streaming service. Amazon offers 950,000 e-books that can be instantly downloaded or read through the Kindle Cloud service. Amazon also offers the Cloud Drive service, in which users get 5GB free to store music, videos, photos or documents, and the Cloud Player music streaming service.

That last part offsets some of the concerns tablet shoppers might have about storage.

The Kindle Fire, unlike the iPad 2 and some other tablets, lacks a camera or microphone, but seriously, do those features drive tablet buying decisions? Maybe for some people, but my guess is that for the vast majority of shoppers, those missing features hardly are deal breakers. Especially at that price point.

For tablet shoppers who have their hearts set on an iPad, the Kindle Fire may be good news. If Amazon's tablet grabs enough market share, expect to see Apple respond with lower prices.

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