We’ll see. It might not work, but essentially Amazon is trying to out-Apple Apple here. Part of the appeal of the iPod, iPhone, and iPad has always been its tight integration with iTunes… 

At a time when there were few good options for buying music legally, Apple launched iTunes — with an almost Napster-like selection of content for reasonable prices. Oh yeah, and there was this iPod thing you could buy to carry your music around with you on the go.

By the time the iPhone came around, iTunes already had a pretty big consumer lock-in, and simply the fact that it was a phone that worked with iTunes content was a pretty big selling point. Up until that point, nobody had really been talking about apps very much anyway — people just wanted a phone with iTunes.

Flash forward a few years and Apple has added digital movies, books, and other content to its store… it’s not quite as dominant in these areas, because it’s entering the game a bit later — but it is a huge player in the hardware space now. So if you bought into the Apple ecosystem and picked up an iPod, then an iPhone, and an iPad so you could use iTunes, it makes sense to keep it in the family and get your books and movies from there as well.

And while Apple had up until recently always been seen as a premium device maker, the company was able to sell its products for reasonably low prices because of supply-side efficiencies and the iTunes revenue stream. 

Apple took a similar approach with the Kindle and its eBook service… and now it’s taking the same approach with the Kindle Fire, and all of its other services.

The difference is that Amazon may not have as strong a lock on the software or the hardware as Apple has had… but it’s taking the price thing to the extreme here, selling devices close to cost in the hopes of making up the rest of the revenue by locking customers into the Amazon ecosystem.

None of which is to diminish your point — it’s not necessarily good for customers that want choice. But it all depends on what you want to use a tablet for. If you want it to be a portable computer, jack-of-all trades, the Kindle Fire ain’t the device for you. But if you’re looking for a device for media consumption, web surfing, and maybe even some light content creation — but don’t particularly care about advanced software capabilities this model could work. 

I also suspect that it may not be too long before we see hackers picking up $199 tablets and figuring out how to unlock the bootloaders (if they’re locked… which they probably are), and installing alternate operating systems. 

The KF’s $200 price is very appealing. It’s the magic number for a consumer impulse buy. I think Amazon will sell many of these for the holidays.

But for modding value, the present NookC would still be superior. Its inclusion of a SD slot, which the KF lacks, is a major advantage. Also, much of the KF’s value is tied to Amazon’s integrated services. If modded, those would disappear.

I’m looking forward to the announcement of B&N’s NookC follow-ups. Hopefully, B&N will see fit to match the KF’s $200 price.

Mod doesn’t necessarily have to forgo the integrated services.  It may be possible to customize the existing firmware or set up a dual boot. 

While lack of a card reader is a negative, but it is possible to still do mods over the USB and if it can support host mode then you can still maybe use a USB card reader or other USB devices.

Possible lack of bluetooth may be more of a negative, considering it will limit choices of accessories like keyboards for productivity.  Though there are a number of devices showing up that will work over WiFi now as a possible alternative…

While so far the rumor has it the next B&N Nook Color may be priced at $349.  Mind that B&N doesn’t have as much alternative revenue sources as Amazon and the more powerful tablets aren’t that cheap to make.

Yes, NC’s ManualNooter left the existing OS intact. However, it doesn’t have the same flexibility as the full-fledged CM7.

As for dual-boot, that would mean redoing the partitions, which while isn’t very hard, would still fall into the “hardcore” category, meaning fewer people would care to try it. And since the KF has only 8GB w/o external expansion, there’ll that much less space for content. Remember that one of the KF’s appeal is that you can store stuff on Amazon’s cloud, which undoubtedly will need authentication, and won’t be accessible outside of its custom OS.

Good point about BT.

From what I’ve read, B&N will have two NC follow-ups at $349 and $249. It doesn’t make sense to abandon the $249 price point, since that has been a big seller for them. It may well mean they’re keeping the existing NC, but I doubt it, since its weak SoC can’t do videos very well.

I do think B&N will need to match the KF price for the 7″ model and hope to make it up on content sales. They’ll get killed otherwise. It’s a tough choice for them, being underpriced by a larger competitor.

Personally, I think the Kindle Fire will do a lot to send the tablet market into the direction that it needs to go (down in price).  For $199 they may have a serious winner on their hands.

Aside from the lack of SD, etc. I’m trying really hard to find a reason not to buy this tablet (perhaps as a gift?).

What is certain is that we the consumer are going to see a lot of goodies falling from the skies in the coming years!

No wait!

….. on second thought, I don’t need this tablet!  I’m happy with my no-contract LG Optimus V ($140 Android smartphone) and iPod Touch (4th generation).  I enjoy reading on both : )    

Who is going to buy this tablet? I suspect that the Kindle Fire is going to have its hands full with serious competition in the very near future so I really don’t see the hardcore crowd going for it!