If the $250 price tag includes membership in Amazon Prime, as rumored, that price becomes a bargain. Membership in the service is a $79 value -- effectively bringing the cost of the tablet itself to only $171, and providing additional value unique to the Kindle tablet. Amazon Prime provides free two-day shipping on eligible Amazon purchases, and has its own Netflix-like movie streaming service. For example, there are also rumors that Amazon is preparing a subscription model for e-books, similar to what Netflix offers for movies; the book subscription would also be included as part of Amazon Prime.
Amazon has already launched its own Android app store. The Amazon app store for Android integrates Android into the Amazon ecosystem, and the Kindle tablet will integrate Amazon into the Android ecosystem. The combination of the capabilities of Android and the brand recognition and respect of Amazon will make the Kindle tablet a formidable competitor.
The Amazon Kindle tablet is entering an overwhelming sea of tablet rivals.
The 7-inch form factor is closer to the size of the Kindle e-reader, and for many it hits a sweet spot between being large enough to be useful as a tablet, yet small enough to be more portable and well-suited for one-handed use. While the Kindle tablet will be measured against the iPad 2 like every other tablet, its real competition comes from other 7-inch tablets like the Acer Iconia A100, the Lenovo A1, and the upcoming successor to the original 7-inch Samsung Galaxy Tab, now bumped slightly larger to the 7.7-inch Samsung Galaxy Tab 7.7.
Comparisons to the Barnes & Noble Nook Color are also inevitable. The $249 Nook Color is an e-reader, but it is built on its own custom version of Android, and Barnes & Noble eventually embraced those Android roots to make the Nook Color a low-cost Android tablet with its own app store.
Barnes & Noble is also rumored to be launching a 10-inch version of the Nook Color before the end of 2011. It is expected to sell for $349, and will give Barnes & Noble a head start against a larger Kindle tablet for users who prefer the 10-inch tablet form factor. Amazon's Weak Spot
For all of its potential advantages, the Amazon Kindle tablet also faces challenges.
First, just as there are those who prefer the 7-inch form factor, there are those who do not. At 7 inches, the display has significantly less real estate than a 9- or 10-inch tablet, yet it is still too big to fit comfortably in a pocket. It is possible that Amazon chose 7 inches to intentionally avoid direct iPad comparisons, or to make the device more appealing to the Kindle e-reader fan base.
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