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It's Not an iPad Killer, It's a Race to the Bottom for e-Readers

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Image by AFP/Getty Images via @daylife

Amazon’s Fire turned heads yesterday, no doubt, but I don’t think it is our long-awaited iPad killer. If Amazon is going to be producer of such a unicorn, it will be the Fire’s next iteration, which is rumored to come out in the first quarter of 2012  and expected to have both the Kindle’s e-ink technology and more advanced multi-media capabilities. And more content, of course. For if nothing else the Fire is your stereotypical $199 printer - sold at or possibly below cost and counting on the $29.99 monthly cartridge sales in perpetuity to make margins. Or a cheap razor and its very expensive blades or $59.99 high end smartphone tied to a two-year very expensive contract. You get the picture.

At bottom, though, it is a 7-inch screen and I second Apple CEO Steve Jobs when he famously said last year, those are DOA for the tablet market. (Although Motorola could prove me wrong when it, as rumors say, releases a 7-inch device this year. But that’s for another post).

Nook Killer

What the Fire most definitely is, however, is a Nook killer. Certainly Barnes & Noble’s 6.8% drop in its stock price on Thursday indicated at least some investors might think so.

Amazon, after all, came out not just with a tablet but three other Kindles - technically four with the Fire. There is an option for people who want the cheapest device possible, two choices for touch interface and of course, the color-screen, music/video gadget that is the Kindle Fire.

"Amazon is flooding the spectrum of eContent reader category to make it a no-brainer for consumers to choose one of its models over Nook," Azita Arvani of the Arvani Group says. “In process, it may take a lot of loss and have to deal with more product categories than needed, but it could make a big dent in Nook competition.”

How aggressively Barnes & Noble fights back remains to be seen, of course, but a price and content war seem inevitable at this point.

Until then, the iPad can float above it all in its premium interactive tablet category.