Top Reasons Why Amazon’s Kindle Fire Can’t Kill Apple's iPad2

Amazon.com Inc. has forayed into the already overcrowded tablet market with its Kindle Fire device, with content being its main focus.

Apart from outfitting it with a new browser -- Amazon Silk -- the online retailing giant has offered a 30-day free trial of Amazon Prime that allows access to streaming of Amazon's multimedia library of movies and TV shows. Amazon is investing heavily in Prime by bringing new content from CBS, NBCUniversal, and Twentieth Century Fox.

Amazon’s tablet, which would ship beginning Nov. 15 for $199, has been projected by the media and tech enthusiasts as an iPad killer due to its ecosystem and content similarities to Apple Inc's tablet. In addition, Amazon's Kindle e-reader has a huge following.

But does Kindle Fire have the fuel to burn iPad2?

At the outset, Kindle Fire addresses a different market and may not be a real competitor to the iPad 2 as the Amazon product mainly targets customers who use tablets lightly and have a tight budget.

“Our initial take on the 'Kindle Fire' is that the product lacks the enhanced capabilities, aesthetics, power, and rich features found on the iPad2, which is why the price point of $199 is below the $499 entry point for the iPad2,” Ticonderoga Securities analyst Brian White wrote in a note to clients.

White added that the 7-inch screen is too small for a tablet device, as Steve Jobs has previously highlighted, while the lack of a 3G connection will keep users confined to a Wi-Fi world.

Kindle Fire lacks a camera, which may disappoint photo geeks and also takes away the feature of video calling, a must-have feature in today’s tablets. The iPad2 has a VGA camera on the front and a 720p camera on the back for video calling.

“Also, the aesthetics of the Kindle Fire seem tired to us and clearly pale in comparison with the iPad2. Again, we believe there is a market for the Kindle Fire, but [it is] not the market that Apple is addressing,” White said.

Meanwhile, Apple has a better processor for iPad2 in A5, which can dynamically adjust its frequency to save battery life. Kindle Fire has a 1GHz TI OMAP chip.

Kindle Fire comes without 3G support and gyroscopic sensors, while iPad2 comes with both Wi-Fi and 3G versions and has a three-axis gyroscope.

However, content is an area where Amazon could rival Apple, and the device would leverage Amazon's recent cloud drive storage capability.

As with Apple's iTunes, users could log into the Amazon tablet using their existing Amazon ID and instantly gain access to movies, TV shows, music, and digital games. Amazon already has customers' credit-card numbers, which is critical for giving easy access to content.

Moreover, Amazon’s tablet is cheap, and it would carry out all the basic functions that one normally does on a tablet, such as accessing email, surfing the Web, and watching videos. If all goes well, the Kindle Fire could be an excellent alternative to iPad for price-conscious consumers who are light users of tablets.

But, again, Kindle Fire may not be a threat to iPad2, which targets a different audience altogether.

Following is a comparison of iPad2 and Kindle Fire: