Amazon’s Kindle Fire tablet runs Android, has a nice screen, is fast, cheap ($199), features an innovative browser, and – thanks to being an Android tablet at heart – offers support for thousands of apps out of the box. I doubt, however, that it’s a major threat to the iPad. The tablet manufacturers that should be very worried however, are those who are also in the Android business, including Barnes & Noble with its $249 Nook Color. The reason for this, I think, is Amazon’s superior ecosystem and the low, low price.

Before the Kindle Fire, There Was No Android Tablet Market

My basic theory of the tablet market until now was always that there really wasn’t one – there was only an iPad market (I must have picked this idea up from someone, but I can’t for the life of me remember where I first heard it). The Android tablets on the market today are about as expensive as Apple’s iPad, but consumers just don’t want them at that price point. In terms of hardware, they are often comparable with the iPad, though the software still lags behind in some areas.

When you talk about tablets to mainstream users, though, all they think about is the iPad. That may be due to Apple’s brand and smart marketing, or the failure of the other manufacturers to position and price their devices in the right way. The result so far has been very clear, though: Apple can barely keep up with demand and the others couldn’t find buyers.

The Kindle Fire: Let The Android Tablet Price Wars Begin

At $199, however, the Kindle Fire could change this. I doubt it will hurt the iPad (though it may siphon off some users), but it will hurt the other Android tablet manufacturers.

The Fire is a pared-down tablet – no doubt about it. It’s small, doesn’t feature a camera, and there is no optional 3G connection either. It’s a perfectly capable tablet, though, and does the things most users want to do on their tablets: surf the web (with the fast new Silk browser, that shouldn’t be a problem), read books, read magazines and watch movies and TV shows. All of this, Amazon is giving users for a price nobody else can currently match. There may not be a camera on the Fire, but I don’t think that’s a dealbreaker for many potential buyers. It does what most consumers want to do with their tablet and at $199, I wouldn’t be surprised if Amazon ended up with supply issues ahead of this year’s holiday season.

What About the Nook?

As a 7” tablet from a company known mostly for selling books, the Kindle Fire also obviously competes directly with the $249 Nook Color from Barnes & Noble. The price difference here may only be $50, but I doubt B&N will sell a lot of Nooks (even if they reduce the price to $199, too) given that Amazon’s ecosystem is vastly superior to B&N’s.

Will Users Want a Basic 7” Tablet?

The tablet market outside of the iPad world is still young. It still remains to be seen whether consumers will really take to smaller tablets. I have no doubt, though, that many will look at the full-price competition from Samsung, Acer and others and buy the $199 Amazon tablet instead (and maybe a basic $79 Kindle as a stocking stuffer as well).