So we see another challenger to Apple's
Price vs. specs
The first thing about the Fire that pundits are crazy for is its terribly low price -- but if I bought it, I'd be banging my head against the wall, because I wouldn't be able to do half the things I can do on an iPad or Motorola Mobility's
Although the Fire's announcement helped send Amazon's stock north, I expect the euphoria to fizzle out once the tablet hits the shelves. How much can you really expect from 8 GB of memory and an app store that offers one-twentieth of what's on the Android Market? Moreover, the Kindle Fire runs the risk of becoming obsolete next year, when Google
Stepping into the fire
So is the Fire hype just a case of initial euphoria that will wither away with time? You betcha -- unless Amazon keeps offering users updates and more apps.
Sure, the tablet could be a boon for Amazon's retail sales, as fellow Fool Alex Planes argued. But everything hinges on acceptability. Gadget freaks like me will certainly go for more powerful tabs with a better resolution and loads of other packages. Amazon expects to sell the Fire thinking people will buy it to read books and watch movies, but they forget that people don't buy tabs just to read books, and most people don't prefer watching movies on a low-resolution screen. And will parents really pay $200 this holiday season just for a gadget for their kids to read comics on?
The Foolish bottom line
The price is the biggest weapon in the Fire's arsenal, but people may not mind shelling out more for a better product. If the tablet does take off, can it sustain its momentum? Will Amazon see its top line fatten and make investors happy with this Fire? Or will it just turn out to be a dud like Research In Motion's
Fool contributor Harsh Chauhan owns none of the stocks mentioned in the article. The Motley Fool owns shares of Google, Research In Motion, and Apple. Motley Fool newsletter services have recommended buying shares of Amazon.com, Google, and Apple and 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.