Kindle Fire Cost vs Price, 6 million Kindle Fires might sell in 2011

The Kindle Fire has taken people by storm –

  1. Journalists are stunned that it isn’t identical to the $500 iPad 2. Oh Lords, why is this $199 Tablet not identical to our beloved $499 God of All Devices?
  2. Kindle Fire owners have decided to drive normal Kindle owners crazy by taking over the Kindle forums and asking all sorts of wondrous questions – Why does my Kindle Fire not transform into an eInk Reader in sunshine? Is it because I was a bad girl and Santa has no presents for me this Christmas?
  3. Apple people are quaking in their boots AKA pretending aesthetic superiority. Yes Dorian, I do realize it is incredibly cheap but it’s not really the sort of device I would carry with me to the Society Ball.

Perhaps the worst affected are analysts of all stripes and colors. Let’s consider two examples.

Apparently, now there might be 6 million Kindle Fires sold in 2011

Here’s how analysts’ opinions have varied over the last 3 to 4 weeks –

  1. 4 weeks ago: Might I add, there is absolutely no market for a non-iPad Tablet. Amazon will just be the latest tragic debutante.
  2. 3 weeks ago: $199? It is appalling how shamelessly Amazon competes on price. It doesn’t realize the importance of being earnest and overpriced? Let’s project 3 millions Kindle Fire sales – just to be on the safe side.
  3. 2 weeks ago: By Jove, it’s selling like those scandalous gossip rags. We will have to raise our estimates to 4 million. Of course, thy iPad shall not be affected for it is more than just a Tablet, it is a delight and a true gentleman would never stoop to a $199 Tablet.
  4. 1 week ago: Lord Ashby, this is rather discomfiting. This Fire thingie keeps on selling. Let me call for my carriage and go check the neighbourhood GoodPurchase to see what it looks like. Also, increase my estimates to 5 million. I would not wish to look like a fool if this sells well.
  5. Today: This thing keeps selling and selling. Tell the Evening Rags that my estimates are now 6 million Kindle Fires. And bring me some tea and strumpets … I mean tea and crumpets.

Here we have (via CNET, via Teleread) analyst Shim’s shimmering estimate (shimmering as it rushes in to replace yesterday’s estimate and gets pushed out by tomorrow’s estimate) –

“Our supply chain numbers are up to 6 million now,” Richard Shim, an analyst at DisplaySearch, said in a phone interview Friday.

Shim said the timeline for manufacturer build plans was originally at 4 million units. “Shortly after preorders they upped it to 5 [million],” Shim said. “Then, about a week and a half ago as they were getting closer to the actual launch date, they upped it to 6 [million].”

6 million Kindle Fires. But, Lord Shim of Analystshire, there was no tablet market – only an iPad market. Where has this magical and contradictory Tablet market appeared from?

Meanwhile we have the Sir Complain-A-Lots droning on –

A $199 Tablet couldn’t possibly affect sales of a $499 tablet. It’s just money. Would you exchange $300 for the feeling of aesthetic superiority and the additional deep meaning it gives your life?

I don’t like the shape of the Enter button. Did you notice that the Enter button is almost perfectly square when it should have triangular-quadratic edges that fill eyes with happiness and the nectar of the gods?

Apparently, not even 1 out of the 6 million people buying a Kindle Fire considered an iPad. And there will be no effect whatsoever on iPad sales.

Amazon is losing $2.70 on Kindle Fire sales … if you assume Fire went straight from Mr. Bezos’ imagination to a factory in China and then was teleported to customers

The mainstream press seem intent to pretend that Kindle Fire isn’t a bargain.

The latest example is how pretend-analysts are estimating how much Amazon is losing on each Tablet sold.

iSuppli did a rather neat break-down of how much Kindle Fire components cost and what it would cost to put them together into a Kindle Fire. Their answers were –

  1. Cost of components: $185.60.
  2. Cost after adding in manufacturing costs: $201.70.

Naturally, pretend-analysts jumped at this figure and assumed this means Amazon loses $2.70 per Kindle Fire.

Not so fast, dear pretend-analysts. We forget a few small things –

  1. Design Costs. There was a design process involving people on salaries.
  2. Software Costs. The code didn’t exactly write itself. Someone probably spent a lot of time figuring out how to make the Carousel super-embarassing. Let’s not just limit it to showing the last inappropriate book they read, let’s throw in the last few sketchy websites they visited too.
  3. Marketing Costs. Amazon has been doing a lot of marketing. Even space on the website is space that could be used elsewhere (opportunity cost).
  4. Shipping Costs for getting Kindle Fire from the factory to Amazon warehouses. No, there weren’t a bunch of Shipping Companies offering Amazon free 2-day shipping on the Kindle Fire. No, the storks didn’t deliver Kindle Fires to Amazon warehouses either.
  5. Commissions. Lots of people, such as brick and mortar stores and websites (including this website), get a cut from Kindle Fire Sales.

My rough estimate would be (averaged over all Kindle Fires, assuming 15 million sold for the first generation Fire): $2 in Design costs, $4 in Software Costs, $3 in Marketing costs, $2 in Shipping Costs, and $3 in Commissions (probably more if you consider what brick and mortar stores get).

That’s $14. There are probably other items we missed so let’s make it $17.

Of course, now we get the interesting costs that no one ever considers –

  1. Customer Service.
  2. Returns.
  3. Faulty units.

Those probably add $5 per Kindle Fire sold (remember – customer service is over the lifetime of the device). It might go up if Amazon doesn’t fix the bugs quickly.

We get a total of $22. We probably missed a few things so let’s say the range is $22 to $28.30.

Kindle Fire Cost to Amazon is probably $223.70 to $230 per Kindle Fire. We’ve been pretty conservative and it might be more. Additionally, things like lots of returns would increase costs drastically.

Why is Amazon still selling them for $199?

Firstly, it doesn’t have a choice. It can’t let B&N tie up the low-price, high-quality Tablet Market.

Secondly, it thinks (quite rightly) that it can more than make up the loss over time.

So, we shouldn’t worry too much about the loss-leader $199 price of Kindle Fire. Amazon will make back the $23 to $31 it is losing – over time.

Importance of Stores for Kindle Fire Sales, Amusing Attacks on Kindle Fire

The Kindle Fire is coming under some really heavy attacks in the press recently. The bar it is being held to is the $500 iPad.

Just wanted to write a general post on – Why most of these attacks are amusing, the importance of stores for Kindle Fire sales.

Context is Everything – Why most attacks on the Kindle Fire are amusing

A lot of the attacks on the Kindle Fire come with in-built assumptions that the people don’t really spell out i.e.

  1. They ignore the price difference between a $200 tablet and a $500 tablet.
  2. They assume a $200 Tablet will perform as well as a $500 Tablet.
  3. They believe there’s only one design philosophy that can be good.
  4. They think that if a new tablet uses some paradigms that they are not used to, then it must be terrible.
  5. They are aligned with one particular company and are invested in its success i.e. write about them, make apps for them, or some other alignment. They assume that this alignment doesn’t color their motivations and words.

Yet, all these people write pretending there is no bias. That’s the first thing that makes the attacks amusing. The complete lack of self-awareness.

My post isn’t pure as snow either – Writing about the Kindle and making Kindle Apps means I’m biased towards Kindles and Amazon. I will try to account for that but spelling it out so you’re aware that this is just one person’s biased perspective.

The second thing that is really amusing is the nitpicking and the complete lack of understanding that this is a V1 product.

Kindle Fire is a V1 product, but it’s getting zero benefit of the doubt

Kindle Fire is experiencing what Nook 1 did.

Nook 1 was built up by the Press as the most amazing device ever – a combination of LCD and eInk. When the first version had some bugs and was sluggish the Press turned on it violently.

Nook still did well. B&N fixed quite a few of the bugs. B&N went on to release more Nooks and, perhaps most importantly, Nook Color.

At the time, I’d written in defence of the Nook. The way Kindle Fire is being treated by some people is just as disappointing, if not more.

First, the Press tried to paint it as a magical $200 device that would be just as good as $500 Tablets. Then, when they realized it isn’t as good as $500 Tablets, they attacked it like rabid dogs.

You don’t write-off or bad-mouth a first generation product because of a few bugs. It’s a V1 – even Nostradamus couldn’t make a product that was perfect in V1.

With Kindle Fire, it’s fascinating to see how interesting some of the complaints are (my thoughts in italics) –

  1. It’s sluggish and unresponsive. Note: Haven’t found any problems – marginal speed differences aren’t my forte. iPad, Nook Color, Kindle Fire – all three seem fine to me.
  2. The Carousel is difficult to use. Yes, this is indeed the case. Let me go find $300 so that I can avoid the unbearable agony of the Cover Flow UI not being perfect.
  3. This is an exact quote – “The asymmetrical bezel’s chin is distracting in landscape orientation”. Asymmetrical, Bezel, Chin – Those are three words I would never have expected to find in such close proximity. If you can get distracted by an asymmetric bezel’s chin, then one has to wonder exactly what a device would have to do to keep your attention.
  4. Page Turns (it’s always the page turns) aren’t animated well enough. The exact quote – “The page-turn animation, a simple full-screen slide, is distracting, too long, and jerky.”. It took me a lot of trying to understand exactly how this writer got worked up about the 0.1 second long page turns. It’s literally a page sliding off quickly and another sliding on – there’s nothing long or distracting about it. Let’s hope, for the sake of his mental health, that he never runs into an actual physical book. 
  5. Another exact quote – I kept inadvertently turning pages when I intended to bring up the menu. Anyone who owns a Kindle Fire is going to have a hearty chuckle at this. You tap the middle of the page to get the menu. You tap the left edge to go back and you tap the right edge to go forward. Perhaps we need to have the device read your brain waves – except that wouldn’t make you happy either because it would keep going to instead of to the next page. Dear Mr. Complain-A-Lot – you do realize that if you keep writing things like this people will start thinking you are a page-turn challenged nitpicky whiner.
  6. It’s not an iPad. I only write good things if it’s an iPad. Thanks for clearing that up. Yes, it’s not an iPad. Flip it around – You see the big ‘Kindle’. That’s your first clue. How many more do you need?

That brings us to the two real gems. First, we have a complaint about the free Prime videos –

The free Prime video selection is very poor compared to Netflix’s streaming library. The TV selection is particularly misleading: they’ll list a show, but only one season, or some subset of its episodes, is actually free.

Let’s get this straight – You paid $79 and got free 2-day shipping for a year. Amazon also added in free movies and one free book loan a month.

Now, you’re complaining that the free movies thrown in aren’t as extensive as what you get from Netflix for $7.99 a month. Well, please hold on Sir Complain-A-Lot. Let us reunite the cast of Friends for you and have them shoot the new season in your house. Perhaps you would still complain that you’d have preferred Seinfeld.

Next, we have a complaint about being ‘almost uncomfortable’ –

The bottom-left corner of the Fire, when held in portrait, gets noticeably warm during use. It’s almost uncomfortable to hold during long, moderately intensive tasks… such as video playback.

This is what happens when you let men get manicures and pedicures and tell them it’s OK to get in touch with their emotions.

Let’s imagine Sir Complain-A-Lot coming up to Chuck Norris and saying – Chuck Norris, my Tablet got noticeably warm today and it was almost uncomfortable. What should I do?

Chuck Norris would probably reply – You should let me roundhouse kick your ‘almost uncomfortable’ness out of your head.

If we’re lucky that roundhouse kick will also take care of the addiction to perfectly animated page turns.

The third thing that’s amusing, and sad, is that these are reviews written not for users but for the review writer’s own gratification.

Attacks on the Kindle Fire are self-serving, and not customer-oriented

What’s been missing is any attempt to write a review from the perspective of the people who would actually want to buy a $200 Tablet. People who don’t believe that the only correct design philosophy is Apple’s. People who don’t really care that if Kindle Fire cuts into iPad sales then there might be an impact on the earnings of people who make iPad apps.

Lots of users want to know whether to buy a $199 Kindle Fire or a $199 iPod Touch. Yet, all the Kindle Fire articles are fixated on comparing Kindle Fire with iPad. Perhaps they don’t realize that the decision being made is usually Kindle Fire vs Nook Tablet vs iPod Touch. That the number of people who are actually choosing between a $200 Tablet and a $500 Tablet is relatively small.

The strangest thing is reviewers saying – Yes, we know Kindle Fire is $200 and iPad is $500 but Kindle Fire is not as shiny as the iPad. When we watch movies on it they don’t have animated page turns.

The Importance of Being Exactly As Fast as the $500 Tablet

One of the best examples of this obsession with comparing Kindle Fire with $500 Tablets is the whole ‘sluggishness’ debate.

Some reviewers are claiming that the device is sluggish. An almost identical number of reviewers are claiming it’s fast and responsive.

Who do we believe?

It was fast and responsive for me. However, every person’s definition of fast and responsive is different. So, how can a person tell whether it’s fast or sluggish?

The simplest solution: Go to a store and try it out for yourself. Chances are – you’ll like it.

If someone has been using a $500 Tablet and then finds Kindle Fire to be marginally slower – That doesn’t make it sluggish. It just makes it ‘not as fast as the $500 iPad’.

Kindle Fire haters are mostly writing from the wrong context (expecting a $200 Tablet to be as fast as a $500 Tablet, assuming the only right design choices are what Apple decides, safeguarding their livelihoods or their tech religion).

If Apple had removed the volume buttons, then the tech press would be calling it revolutionary. If Amazon does it, it’s a ‘terrible design decision’.

If you’re looking for a good, low-price tablet, don’t let the attacks on the Kindle Fire sway you. Why not go to a Store and see for yourself?

The Importance of Stores for Kindle Fire Sales

The reason stores are critically important for Kindle Fire is that Apple people are once again waging a war based on unreality. Since they have chefs cook tech journalists customized omelettes at their events, they have the tech press playing along.

Note: Let it not be said that Apple doesn’t allow customization. As long as it’s omelettes it’s fine.

Apple people are doing a combination of things –

  1. Comparing the $200 Kindle Fire to the $500 iPad non-stop. How can you, in good faith, compare Kindle Fire to a device that is 2.5 times the price?
  2. Drawing up a list of 10 to 15 vague complaints. Add these on to the real drawbacks (and there are a few) and a good Kindle Fire Tablet suddenly seems terrible.
  3. Being intentionally vague. How on Earth does anyone respond to an asymmetric bezel’s chin? Make it symmetric and Apple sues you in court for stealing the design (apparently they think other Tablet makers should make their Tablets triangular). Make it asymmetric and reviewers will complain about your Tablet’s chin (Jane Austen could probably write a lot about what a man’s chin says about him – but it’s a special gift to be able to seriously discuss a Tablet’s chin).
  4. Neglecting to mention any of the good qualities – low price, visually attractive user interface, very easy to use, light, can hold with one hand, easy to carry around, size is great for email and browsing. With Kindle it was understandable – most tech journalists didn’t read enough to be able to appreciate it. You can’t blame a tech journalist who only reads movies to understand the Kindle. What’s the excuse now?
  5. Waging a concerted campaign and trying to prevent Kindle Fire from getting momentum. That’s really what it is. The possibility that Amazon might sell 5 million Kindle Fires in 2011 has scared the Apple people and they are pulling out all the stops. Soon they’ll be blaming Kindle Fire for global warming.

Apple people are experts in vague and intangible attacks. Amazon can’t win a war against them by fighting on their terms.

Amazon says – Here’s Kindle Fire. For $200 it does 80% of the things the $500 Tablets do.

Apple says – But the animated page turns aren’t perfect. Is it really worth $300 to lose the ability to have that page glide perfectly across the screen?

Amazon can’t win the war of words and stories.

The only way to beat reality distortion is via reality. The Stores will do that. Those 16,000 stores selling Kindle Fires are 16,000 soldiers fighting a war against the reality distortion of the tech press. Walk into these stores and suddenly $300 means $300 of hard-earned money. And page turns become things you don’t even notice if you’re actually reading a book.

People are very smart. They know what they want and they know it when they see it. No amount of perfectly crafted and precisely imprecise attacks will change that. Very few people are stupid enough to pass on a very good Tablet just because it doesn’t have the sort of chin that would allow Apple to sue it in court.

Perhaps the Kindle Fire at $200 is perfect for you. Perhaps it’s not. Perhaps you expect a $500 Tablet for $200. Perhaps you’re happy with what you get for $199. The best way to find out is to go to a store and see for yourself.

It’s really unfortunate that the tech press keeps comparing Kindle Fire with the iPad. That it keeps writing Kindle Fire reviews and articles that assume every day people want the exact same things that tech journalists do. Kindle and Nook and Nook Color have all survived this intellectual dishonesty of the Press and Kindle Fire will too. Meanwhile we should call Chuck Norris so he can do something about all these Complain-A-Lots and their unhealthy obsession with Tablet chins and animated page turns.

Note: Chuck Norris was not hurt during the making of this post. Actually, Chuck Norris can never be hurt – we just put in the note to avoid unnecessary concern on your behalf. Chuck Norris says that if one more person who really doesn’t read much writes about how important animated page turns are for reading, Chuck Norris might get a headache.

Kindle Fire – Unfiltered Kindle Fire first impressions

Got the Kindle Fire yesterday morning (thanks Nick!), and these are the first 10 things that registered strongly.

It’s a LOT better than the press would have you believe

After expecting something terrible, it was a pleasant surprise to find out it’s a really good tablet. It seems the press was suffering from ‘$200 = $500’ disease. It’s understandable – since tech bloggers get ‘free’ review units and they don’t have to decide whether Device X is worth $300 more of their hard-earned money.

For a $200 Tablet, the Kindle Fire is really, really good. The rest of this post has some rather harsh words. However, it’s all within the context of:

Amazon’s Kindle Fire has continued the tradition that Nook Color started and IMPROVED on it. Value tablets are now providing 80% of what high-end Tablets provide.

It’s going to be a massacre – unless Apple releases Tablets in the $300 to $350 range soon (by mid 2012).

Warning: If you value form over function, do not even think about buying the Kindle Fire. If you’re a ‘value for money’ and ‘ease of use’ type of gal, you’ll love Kindle Fire. If you’re an ‘animated page turns are more important than the words’ kind of guy, you’ll hate Kindle Fire.

The 7″ Screen and overall Kindle Fire Size and Weight are great and underrated

Quite a few Kindle Fire reviews from tech pretend-journalists have claimed that 10″ is some magical size for Tablets. That’s complete nonsense.

There’s a special term for people who claim that moving from a physical keyboard and a 21″ monitor to the iPad’s keyboard and 10″ monitor is no problem at all, but moving from a 10″ screen to a 7″ screen is a cataclysm – vocal minority.

At least 75% of people will find the 7″ screen size better.

You have to look at the context: Apple was tired of struggling against Windows (Mac currently has 5% global market share) and wanted to make post-PC devices. It really did think, and probably still thinks, that 10″ tablets can replace desktop PCs and laptops.

The 10″ screen was not the result of some pure aim to make the best Tablet. It was an attempt to replace laptops and netbooks.

The real questions are – What is the best size screen for a tablet? Should an actual Tablet be something you can hold in one hand? Should it be something you can carry around easily?

B&N and Amazon are making Tablets you can actually hold and carry around easily.

7″ is a much better screen size for most things – reading, watching movies, carrying, portability. You have to consider size and weight and how much of the screen you can reach.

Here’s an example of Apple devotees’ arguments about having a screen size that is ‘accessible’:

  • iPhone screen size of 3.5″ is better than 4.3″ screen size of rival smartphones because ‘you can’t reach more than 3.5″ of the screen with your fingers’ while holding a phone.

Well, that exact same argument holds for why a 7″ Tablet is more convenient. Plus the additional problem that a 10″ Tablet is too heavy and awkward to hold with one hand. It even tires you out if you hold it with two hands.

My recommendation would be to consider the things you’ll be doing with your Tablet – watching movies, reading books, surfing the web, doing email, shopping. For most of these – a Tablet that is easy to hold, and where the screen is easy to reach, is much more valuable than a larger, heavier one.

Reading in bed, at night, is a perfect example – 10″ is way too big for most people. It’s supposed to be a Tablet not a pillow.

Kindle Fire is more of a Store than a Tablet

It’s hard not to notice that everything in the Tablet seems optimized towards stuff you bought from Amazon.

If you’re looking for a tablet that supports your relationship with Amazon – Kindle Fire is perfect.

The Carousel was a really easy way to go through all my Kindle purchases and pick out the ones that are interesting. It’s just strange that the only way to interact with content is the Carousel and Shelves. Plus the amount of finger dexterity required is just ridiculous. It’s made for guitarists and piano players.

Kindle Fire is a Tablet meant for you to buy Kindle books and Kindle Store magazines and download Amazon Music and movies. Apps take a backstage and things you might want to add yourself – even more so.

Silk might as well be Sandpaper

The whole grand Silk browser and its caching in the clouds either seems worthless or it’s only making up for some coding deficiency in the browser. The Kindle Fire’s browser was exactly as fast as Nook Color’s browser – when averaged across various sites. It was marginally faster on 4 sites and marginally slower on 2 sites. Not what you’d expect after all that Silk talk.

Kindle Fire isn’t demonstrably better than Nook Color

Bottom line: I would not replace my 1-year-old Nook Color with the Kindle Fire. This should be very worrying to Amazon if it intends to steal existing Nook Color owners.

Of course, chances are that Amazon doesn’t care at all about existing Nook Color owners as prospective Kindle Fire owners. Perhaps it only wants to scoop up existing Amazon customers. Kindle Fire is pretty good for that.

Kindle Fire is about as good as Nook Color when you consider various pros and cons – other than the connection to Amazon. The addition of a tight connection to Amazon will probably seem like a big win for existing Amazon customers.

Kindle Fire is literally a connection to Amazon

This point is intriguing and might lead to a lot in the future.

Amazon isn’t so much selling you a Tablet as an umbilical cord to Amazon. That’s why a device that is $203 in just parts (which excludes software costs, shipping, marketing, customer service) is sold for $199.

Firstly, Kindle Fire is more of a store than a tablet (covered above). Secondly, it’s literally a connection to Amazon and it’s interesting/worrying/curious just how strong the connection is.

I get the feeling Silk is more about safe-guarding the user’s path to Amazon than it is about Speed. Making sure Google or someone else doesn’t get in the way. That explains why there was so much focus on ‘speed of Silk’ when it isn’t noticeably faster. Perhaps Amazon just wants to deflect attention from how it’s kicking Google out of the customer purchase path.

Jeff Bezos needs to hire Jonathan Ive

Please Mr. Bezos.

Now you have a phone in the works. There are endless generations of Kindles and Kindle Fires and Kindle Phones lined up.

Please, for the love of all that is beautiful on this Earth, hire someone like Jonathan Ive who will add that missing dimension. Someone, anyone, who will stand up to you and say – It’s NOT OK to send out a device that looks like a Scion XB.

It doesn’t take money, it just takes someone with the conviction to say – For the same amount of effort and money we can ship something absolutely beautiful. Adding Gorilla Glass does not mean you have to make the Tablet a Gorilla.

If Jonathan Ive makes future Kindles and Kindle Fires and Kindle Phones as pretty as Audrey Hepburn, then he gets the recognition he deserves as one of the greatest designers ever.

Right now, Kindle Fire is literally a block. It’s just a slab with a beautiful Tablet inside it. That whole ‘the statue is already in the rock, and we just have to carve away the excessive rock’ thing. Well, Amazon forgot to carve out the excessive rock.

The design of the buttons at the bottom almost makes you cry and the border around the screen and near the edges is just terrible. The ‘slide to unlock’ strip must have been design by committee because there’s no single person capable of something so completely tasteless. Bonus points for making the font size of the date literally 1/7th the font size of the time.

Kindle Fire is, overall, a demonstration of Amazon’s strengths and weaknesses

It highlights what Amazon does well –

  1. Provide a Store and sell things.
  2. Create strong connections to users.
  3. Do good software.
  4. Make things simple to use.
  5. Provide a complete solution for buying everything or almost everything.
  6. Cut on prices while not compromising quality much.
  7. Cater to everyone without any qualifiers.

It also, unfortunately, highlights what Amazon doesn’t do well –

  1. Make pure devices that are ‘the best device available’ when separated from the ecosystem. Kindle Fire’s biggest strengths are its connection to Amazon and its low price – as opposed to the quality of the device itself.
  2. Polish V1 products to super high quality. Kindle Fire is a 5 to 10 million person Beta Test.
  3. Make big radical changes. Kindle Fire is supposedly built on the Playbook design. The design sure does look like it was photocopied from some other device’s blueprint.
  4. Think of devices as things users own. We see it with the lack of the option to set screensavers. Android supports live wallpapers but those aren’t supported either. It’s Amazon’s store-front in your hands and they like to control what you see. It also preserves the option to later add sponsored screensavers for Kindle Fire.
  5. Release only finished products. Amazon loves to do continuous beta testing and Kindle Fire is the starkest example yet.

Just a Quick Note: $100 bet that Amazon had thought of using sponsored screensavers to sell other Amazon things even before the Kindle was launched in 2007. That the plan all along was to build up to this ‘Kindle Fire AKA Kindle Store’ in users’ hands.

Kindle Fire represents Amazon’s biggest strengths and most exploitable weaknesses.

$199 is a very good price, and we are all in a Beta Test

My rough estimate would be – You’re getting a device worth $350 but in Beta Stage. So it’s more like getting a $250 device.

If you’re an existing Amazon customer – it’s a steal and a very valuable Tablet. If you’re not an existing Amazon customer – consider whether you will benefit or not from becoming an Amazon customer.

You could also, if you so choose, root the Kindle Fire and use it as an Android Tablet. However, my suspicion is that the 512 MB of RAM just isn’t enough for it to work with a version of Android that isn’t optimized for Kindle Fire. Would hate to have to use the already slow browser without ‘Cloud Silk Condensation Spider Poison’ magic.

The Tablet for everyone else

My overall impression of Kindle Fire is much better than I thought it would be. It’s a Beta Test and it’s unpolished but it’s a winner.

Yes, it’s a connection to Amazon and it’s built primarily as a means to get people to buy more things, digital and physical, from Amazon. However, what we end up with is a very capable 7″ Tablet that is easy to use. It’s also not difficult to root – plus you can install apps on it from other sources without rooting.

Once you’ve bought it, it’s yours. You can choose not to buy anything from Amazon. You can choose to root it and install Android 4.0 (when it becomes available). You could also choose to partake from the Amazon umbilical cord in small doses.

Kindle Fire ignites the low-price, high-quality Tablet race. B&N has cut Nook Color’s price to $199. It has released its new powerful Nook Tablet for $249. It is lining up video content. Lots of other Tablet companies are going to participate in this race. It will bring high quality Tablets to a LOT of people. People spurned by the narrow-minded companies selling $500 Tablets.

Kindle Fire and Nook Color and Nook Tablet and other low-price, high quality Tablets will bring high quality Tablets to the rest of us. It will fill lots of stockings which aren’t big enough to hold $500 Tablets.

The Kindle Fire at $200 is a good buy. My recommendation would be to peruse some Nook Tablet reviews from actual users over the next few days and also read the Kindle Fire reviews at Amazon. You should then get a pretty clear picture of which is the better Tablet for you.

If money is no object, then iPad is definitely the most polished Tablet and some other Tablets like Asus’ Transformer are much better netbook and mini-laptop replacements.

A Kindle Fire inspired question – What is the aim of technology?

Is it to provide 99% quality to the 10% of people who can afford to pay a lot? Is it to provide 80% quality to the 50% of people who can afford to pay a reasonable amount?

Kindle Fire is filling the huge void left by Tablets made for rich people. Nook Color and Nook Tablet will fill it too. All the arguments against low-price, high quality Tablets are amusing exercises dealing in ‘intangibles’ and ‘things that can’t really be put into words’. When you have something solid like $300 on one side, then there needs to be something more substantial than ‘intangibles’ on the other.

Kindle Fire does two very critical things – It anchors the price for Tablets at $199. It sets the benchmark for how tightly you can connect a customer to a store.

The first is great for users and the second is great for retailers. $500 Tablets are going to have to capitulate and bring out cheaper models. For $300 less, Kindle Fire provides 80% of the benefits that $500 Tablets do. It also has advantages in size and weight. Because Amazon can keep making money from Kindle Fire owners over the years, it can sell Kindle Fire at a price that is really hard to compete with.