The Real Reason Amazon Kindle Fire Tablet May Be iPad Killer

Most analysts say Amazon's Fire tablet, to start shipping on Nov. 14, won't kill the tablet industry-leading iPad because premium users will continue navigating toward Apple and its OS platform, with a starting price of $499, while bargain hunters will be more drawn to the Kindle Fire, priced at $199.

That's exactly right -- initially.

Apple's iPad 2 is better than the Kindle Fire, with more capability, a bigger screen and and that Apple operating system that consumers around the world love in the iPad and iPhone 2.

Clearly there will be a noticeable difference in customers -- out of the gate.

Buyers of the Amazon Fire tablet will be bargain-conscious, drawn to Amazon's price point, digital content, cloud infrastructure and Prime membership benefits including streaming movies. Meanwhile, Apple will continue to command the premium tablet seekers with its higher-price, superior iPads.

But Amazon gets big fast, and it knows how to grab customers and keep them.

It's been a company mantra since the company was founded by Jeff Bezos in the 1990s -- get big fast -- before becoming the world's largest online retailer that now has a stronghold in consumer technology with its Kindle ereaders and the forthcoming launch of the Fire, the company's first tablet.

Amazon knows customers, and it knows how to win customers -- price and service.

So while Amazon may not appear to be an iPad killer out of the gate, most analysts agree that Amazon will sell many Kindle Fire tablet to those bargain-hunter types -- many first-time tablet entrants in the space that is effectively less than two years old considering the iPad didn't launch until 2010.

But therein lies the challenge for Apple, and the reason Amazon may in fact be an iPad killer with its new Kindle Fire tablet.

As Amazon gains millions of first-time tablet buyers, the company gains a foothold that no other competitor has been able to mount against Apple's iPad, which controls three-fourths of the global tablet market. One year from now, and two years from now, Amazon will be far more sophisticated with new tablet products than the company is with its first.

As the bargain-tablet buyer matures, Amazon will grow with them -- upgrading them to more premium sophisticated products. All the while, Apple's strong-hold on the global tablet market will be evaporating. Amazon will push hard with pricing, as the company always does, and Apple will have a harder and harder time holding on against those pressures.

So while it may not happen overnight, Amazon's entry into the tablet realm may spell trouble for the Apple iPad after all.