Why the Kindle Fire Will Succeed and How it Could Fail

REASONS WHY KINDLE FIRE WILL SUCCEED

1. PRICE -- I keep hearing that the Kindle fire will not steal people away from Apple, and I think for the most part that is correct. People who love Apple products or who have a previous investment in iPhones, iPods, or iPads are not going to necessarily find a lot to love here. Many of the things that the Fire can do, the iPad will do, faster and better. But what I think Amazon has done that may ultimately hurt Apple is making the tablet market accessible to the masses. $499 is a hard price to swallow in a tight economy, especially for people who have a hard time understanding why an iPad is of any value if they have a smartphone, iPod, laptop, and/or e-reader. And the Android based competitors that cropped up in the wake of the iPad have mostly been underwhelming, combining prices that are two high and tablet software that's not quite ready for primetime and has too few apps.
2. SIZE -- Steve Jobs criticized the seven inch size of tablet computer, and many critics agreed. 7 inch seems an odd gray area between a smartphone and a tablet, seemingly providing the least of both worlds. But in handling a few 7 inch tablets and seeing how much easier they were to hold comfortably and type on, I think that the 7 inch size's portability will ultimately be a winner. The iPad is easier to carry than a laptop, but for a device that is $499 and up, it often feels dangerous and heavy using it on the go, or even carrying it in your bag. Using my wife's iPad, I'm always afraid of dropping the thing. With a lighter $199 device, I'll feel safer taking it on the go and be able to drop it in a bag and take it with me.
3. AMAZON.COM -- The Google Appstore has always felt lawless in terms of security. Apple's iTunes has always felt like you're signing up for a timeshare. Amazon's App Store, web presence and familiarity with shoppers will help drive Android app purchases forward, as will Amazon's customer service (which has been excellent for Kindle). Additionally, Amazon's Kindle store provides a much better experience and much more reading options than iTunes.
4. TIMING -- Apple's recent lackluster iPhone announcement coupled with no iPad 3 on the horizon makes the Kindle Fire seem new and exciting, even if the hardware is off the shelf. With nothing else competing for Christmas dollars, the Kindle Fire may be THE electronic item on everyone's wish list.
5. USERS -- Android tablets have failed to catch on like iPads have in part because of lackluster apps. And if people aren't buying the tablets, there's little incentive to program apps for them. That should change with hundreds of thousands lining up to buy the Kindle Fire. App developers will have a rich user base to tailor their software for and the store itself promises a simple and safe way of purchasing apps.

HOW THE KINDLE FIRE COULD FAIL

1. BAD HARDWARE OR OPERATING SYSTEM -- It is troubling that Amazon refused to let any journalists have a hands on experience with the Kindle Fire, and watching the demos, you have to wonder if the scripting included the way the hardware was used. It's possible that Amazon simply wanted to not encounter any issues common with all new devices, or there are some bugs associated with the rush to market that are not yet ironed out. But if Amazon ships outs a high percentage of lemons among the hundred of thousands scheduled to ship, Amazon could find itself with a fiasco on its hands and little hope for recovery, not to mention a reason for Cupertino to gloat.
2. AMAZON VERSION OF ANDROID -- Amazon created its own version of an Android App Store, presumably to compliment the Kindle Fire. However, the Kindle Fire apparently runs a modified version of Android based on an earlier version. As Google continues to develop the Android mobile platform while Amazon branches off on its own, one has to wonder if developers won't soon have to be writing separate apps for each, and if Amazon's own platform development skills will be able to keep up with those of Google's. If the Kindle Fire users suddenly find themselves waiting for apps or worse, seeing inferior apps pop up on the Fire platform, the Fire could wind up being simply an entry level tablet that encourages people to upgrade to better tablets by other companies.
3. PRIVACY ISSUES -- The Kindle Fire's Silk Browser works by using Amazon's own servers to feed you the web pages you want to surf, in a bid to provide more speed. Given that the tablet works on WiFi networks, this seems like an odd addition to the Fire. There are concerns that using Amazon's servers to surf the web will give Amazon too much access to your web surfing habits and allow them to potentially invade your privacy. This remains to be seen, of course.
4. STORAGE -- I have an Android phone. One of the biggest complaints I have with the phone is the poor way in which storage is handled. Too many apps store themselves on the phone itself and NOT the phone's storage card, which leads to making decisions about what you REALLY want vs. what is nice to have on your device. The Kindle Fire is supposed to have 8GB of memory and access to all of your Kindle ready content via the cloud. This may create problems for people that use the Kindle Fire while travelling, where WiFi access won't be readily available, especially if they want to watch movies or listen to their music collection. Hopefully Amazon will figure out a way in which apps can be seamlessly installed and uninstalled via the cloud so that infrequently used apps are still handy.