I've never been too concerned with Amazon.com's (Nasdaq: AMZN) Kindle Fire as a direct threat to Apple's (Nasdaq: AAPL) iPad. Rather, I've maintained that the 7-inch tablet is meant to take on the Google (Nasdaq: GOOG) Android portion of the tablet market.
Meanwhile, others have thought the Kindle Fire's $199 price tag will inevitably steal some share from Cupertino. While Amazon is busy building millions more Kindle Fires to accommodate heavy demand even before its official launch, Apple isn't worried. On the contrary, Apple actually thinks the Kindle Fire is good for it, according to Barclays analyst Ben Reitzes, who recently met with management.
Apple has long maintained that one of Android's biggest weaknesses is its fragmentation. Different smartphones and tablets with different hardware specifications made by different OEMs, like Motorola Mobility (NYSE: MMI) and HTC, run different versions of the operating system and face different software upgrade cycles. This isn't exactly the type of "Think Different" that Apple is fond of.
The next version of Android, Ice Cream Sandwich, hopes to address some of these fragmentation concerns, but in the meantime the Fire does add another layer to the Android cake. Reitzes notes that Apple sees additional fragmentation within the platform as driving users to Apple's "stable" iOS platform. If fragmentation is Android's biggest weakness, the Fire is then making it even weaker.
Although Apple's point is somewhat valid, I think Amazon's strategy is on a higher level. Amazon is the only other player in the tablet space that has the potential to create a confined ecosystem in a similar way that Apple has done -- an ecosystem that happens to be based on Android. In addition, Amazon's forked version of Android is so heavily modified that its specific version becomes less relevant.
Outside Amazon's Android garden, the platform may remain fragmented, but for those within, all that should matter is the experience. Amazon is the only Android tablet player that can create an Apple-esque experience for Android.
Apple is a one-stop shop. Amazon is a one-stop shop. Get the drift?
Add Apple and Amazon to your Watchlist to see them duke it out.
