You Can't Fight Fire With Apples

So Amazon.com (Nasdaq: AMZN  ) has raised the curtain on the latest "iPad killer," its new Kindle Fire tablet. With inferior processing abilities and technical shortcomings, the Kindle Fire simply doesn't bring the heat, and the two devices will never be equal rivals. But then again, Amazon never intended them to be. 

Comparing Apples to Fire
The Kindle Fire's $199 price tag is far less than the cheapest iPad. But the truth is, you get a lot more for your money with Apple's (Nasdaq: AAPL  ) device. Even though it costs more than twice as much as the Kindle Fire, the iPad is also twice the machine.

For starters, Amazon's tablet lacks the iPad's A5 processor, its two video-enabled cameras, and its 64GB internal storage capacity. The Kindle's smaller display and lack of a microphone make the device far less user-friendly.

Beyond this, Apple uses the latest screen technology in the iPad and lets users connect by 3G networks. By contrast, the Kindle Fire has your run-of-the-mill backlit LCD screen and provides no 3G access, thereby shackling its users to Wi-Fi hotspots. How 2010 indeed!

Getting it right with strategy
If you read between the lines, however, Amazon isn't counting on tablet sales, per se. Instead, the Kindle Fire is aligned with the company's strategy of generating big sales by charging small prices -- a strategy that has paid off nicely for the Web giant.

The Fire runs on Amazon's rendition of Google's (Nasdaq: GOOG  ) Android software, which, not coincidentally, ties in neatly with Amazon's digital shopping hub of music, books, videos, and other goods -- where the company hopes to make its real profit.

The company's cloud capabilities also up the ante on the Fire's tablet strategy. Amazon's new Silk Web browser integrates with its Elastic Compute Cloud to speed up Web page loading times. In addition, the cloud-accelerated browser makes up for the tablet's lack of memory by providing free cloud-based storage for all Amazon digital content -- meaning your Amazon e-books, films, and music are stored in a computing cloud and streamed to your tablet for instant viewing.

Coming in hot
Although the Kindle Fire is not the iPad killer it was made out to be in some corners of the media, its ability to connect more users to its digital content will undoubtedly make it a win for Amazon.

Not only will the Fire be the final blow to Hewlett-Packard's (NYSE: HPQ  ) TouchPad and sink sales of Research In Motion's (Nasdaq: RIMM  ) PlayBook tablet and Intel's (Nasdaq: INTC  ) Oak Trail processor chip, but it will also probably increase interest in Amazon's digital products and cloud-based services.

Consequently, if you're in the market for a tablet computer, the iPad is the obvious choice. If, on the other hand, you want a handheld e-reader with cloud capabilities, then the Fire is for you.

Tell me in the comments section below why you're supporting Team iPad, Team Kindle Fire, or both.

Fool contributor Tamara Rutter owns shares of Apple. Follow her on Twitter, where she goes by @TamaraRutter. The Motley Fool owns shares of Google, Apple, and Research In Motion. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Amazon.com, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 06, 2011, at 11:51 PM, demodave wrote:

    Personally, I think you nailed it. The Fire is *for* Amazon, not *against* Apple. As such, it is a winner.

    Please visit with Eric B. And Anders B. They seem to need a clue.

  • Report this Comment On October 07, 2011, at 1:52 AM, epubor wrote:

    kindle fire has so many functions that can meet many needs,if you want to transfer ipad protected music and videos to kindle fire,you can follow me step by step:

    http://www.epubor.com/transfer-ipad-songs-to-kindle-fire.htm...

  • Report this Comment On October 07, 2011, at 6:26 AM, oldgeek1 wrote:

    The I-Pad was first to market with the novelty of a tablet and the cache of Apple, both drove sales. It is doubtful that the Apple name and its choice of processor will be compelling factors that will result in apple maintaing its market share of tablets. If price were the only discriminator Fire at 1/2 the price might still be a tough sell, however the other Amazon functionality tips the scale.

    The Tablet is a niche product that has upside in profits and Amazon will benefit from that growth in the sales of its content. Consumers who want a new TV, lawnmower or book will continue to use Amazon as a source to at least browse and perhaps purchase a huge upside for Amazon Fire over the I-Pad.

    The highly affordable price makes the Fire much more attractive to those who already own a laptop or computer of some sort and want to play with a tablet with less financial risk.

    The issue is not will the Fire kill the I-pad, but rather how much of a hit will apple take in sales and growth of a product where they had a commanding lead. My guess is that Amazon will capture a large share of Apples market and the absence of a camera not a issue. The Amazon cloud and whispersync will be a huge advantage as soon as consumers understand what that brings to the table.

  • Report this Comment On October 07, 2011, at 8:55 AM, kevshrm wrote:

    Get a clue before comparing devices. The Fire is $199 and the iPad that you are comparing it to is $829.00. I'm no genius, but that is a little more than twice as much by my calculations. It is also mentioned that it lacks the iPad's A5 processor. Yeah - that is because Apple uses proprietary hardware. There isn't any device that isn't an Apple that would use that processor. However, the Fire does come with a very capable dual-core processor. The only ones that would label this device as an "iPad killer", are the people that don't take the time to get informed and make a fair comparison. Why not try to compare this to the $200 iPad? Oh, I forgot, you can't get one for under $499. By the way, the Fire use the same IPS screen that the iPad 2 uses, just a smaller version. Try to get your facts right before posting this garbage. It gets tiring reading articles from people who are obviously so biased to Apple that they can't make a fair comparison of devices that are similar in both price and specs.

    Now if you'll excuse me, I'm going to go write an article letting people know why the iPhone is superior to the Motorola Razr.

  • Report this Comment On October 07, 2011, at 11:22 AM, H3D wrote:

    @oldgeek

    Your argument about Amazon's cloud being more advanced than Apple's doesn't work.

    With iCloud Apple substantially leapfrogs Amazon, and since iCloud will be here before Fire will, it has to be counted into the picture.

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