The iPad's sticker price means there's room in the market for a more affordable tablet device
The iPad has been a massive success in the year and a half since its release. For some it has been a laptop replacement, for others a digital reader with dozens of other peripheral uses, and for others the first computer they can use at all. In the year and a half since its release, seemingly every other electronics manufacturer has been trying to build something that would have the same appeal, but so far these efforts have been mostly met with indifference. People don't want a tablet -- they want an iPad.
Amazon's forthcoming tablet just may change that. The -- let's call it the Kindle tablet (or Fire, as we think it'll be called) -- will be smaller, less powerful, and cheaper than Apple's device. And while folks who can't afford a $500 iPad represent a huge market themselves, those of us who want, or already own, an iPad may come to want the Kindle device too. Its expected price of $250 will put it in a completely different affordability category.
Now, everything you've heard about what an "amazing, revolutionary device" the iPad is is true. But here's the thing. Far and away the most important thing it's great at is browsing and reading the internet. (That includes, for a few examples, the New York Times app, the amazing instapaper, and Amazon's own Kindle book reader.) Casual email is a distant second function. And apps like Garage Band, Maps, and Brushes are deservedly celebrated but account for a relatively insignificant proportion of most people's day to day iPad usage.
This makes perfect sense, because anyone who uses a computer outside work uses it primarily for browsing and reading the internet. But the form factor of a laptop is such that you use it while sitting at a desk. An iPad lets you take the internet to places where reading is more comfortable: the couch, the bed, and yes, the bathroom. This, more than everything else put together, is its killer feature.
But as a reading device, the iPad is imperfect. It's way too heavy to hold comfortably, it's too big, and the processor and memory that make it so versatile are overkill for a digital reader.
The argument has been made that a low-cost tablet cannot be a competitor to the iPad, since even the iPad is not a powerful enough computer. But the iPad is a laptop replacement for relatively few people. It's great for email and basic word processing, the aforementioned Garage Band and Brushes apps are great fun for creating music and drawing, and there famously are tens of thousands of other apps to explore. But it falters for the hundreds of big and little tasks we do with our computers that involve using more than one program at a time. (Try posting a video you've found on Twitter to your Tumblr blog. Or try saving an image from the internet, cropping it, and uploading it to your blog. These are things that many computer users do every day, and while they can theoretically be accomplished on an iPad, it takes an extraordinary amount of effort and creative workaround.) The Kindle tablet is even less likely to be a viable laptop replacement than the iPad, but I don't think that's a significant factor in its prospects for success.