Kindle Fire

JP Morgan analyst Mark Moskowitz believes the Amazon Kindle Fire is only the beginning for first time tablet owners, and Kindle buyers will eventually "gravitate to more feature-rich" tablets like the iPad.

Moskowitz recently talked with Apple CEO Tim Cook and CFO Pete Oppenheimer who said people are replacing their home computers with tablets. They believe Kindle owners will eventually want to upgrade to a larger screen and more features like cellular data access once they get a taste of what tablets have to offer. Apple also thinks Amazon's success will be the death of other Android tablets since Apple and Amazon are the only two companies who can provide the total tablet experience.

I don't see a lot of Kindle owners jumping at the chance to spend more money on a second device unless Apple drops the price of the older generation iPads after the release of the iPad 3. A recent UK poll revealed that 46 percent of iPad owners didn't believe they were getting their money's worth, because they hardly use the device at all. It's also little early to start making predictions about the Kindle Fire's influence on the tablet market since it has only been out a few weeks.

I'm not sure if I will ever get this right or not, but according to some Apple fans, comparing devices that run iOS to devices that run Android isn't a fair comparison, because you're not factoring in the total Apple experience. According to some Android fans, comparing Apple products to anything else isn't fair, because Apple products were created by a hipster who stole other people's ideas. Did I get that right?

I still believe comparing the Amazon Kindle and iPad is like comparing apples and oranges, but people are going to do it anyway. It's obvious Amazon skimped on internal components to drive down the price of the Kindle Fire, but what does the general public know about processors and so on? All they know is it's only $200 instead of $500 to play Angry Birds now.

No one said the Kindle Fire would dethrone the iPad (okay maybe some did), but it's living up to expectations as the first Android tablet to actually compete with Apple. Amazon announced that it moved 95,000 units on its first day, a far cry from the iPad's 300,000 units, but an impressive number. Head-to-head the iPad 2 may be laughing, but the Kindle Fire created a roadmap for future tablets to follow. If others catch on, Apple could see a chunk taken out of its tablet market share lead.

The HP TouchPad, Samsung Galaxy Tab and HTC Flyer tried to compete with the iPad on its own terms, and we all know how well that worked out. Unlike smartphones, a lot of people view a tablet as a privilege not a necessity. The Kindle Fire offers a better entertainment experience at an affordable price. Yes it's cool that you can watch a movie, play games and read a book on your phone, but it's so much better on a tablet. The Kindle Fire offers 16,000 apps, a ton of movies, books and music for $200. Even if you shell out the $79 for Amazon Prime, their movie and TV streaming service, it's still cheaper than RIM's BlackBerry Playbook. Yes everyone wants an iPad, but not everyone is going to spend $500 so they can watch a movie at the airport.