I'm sure they will sell just fine. Trying to position this as a threat tom the iPad however is just journalistic license.
It will threaten the Nook. Not the iPad.
But you hit on the key point. Amazon is not trying to compete with the iPad. They are trying to appeal to consumers. And they clearly don't care about techs or computer geeks, or even those who like to fight about open vs walled garden technology. They are selling an enhanced Kindle, not fighting the tablet wars.
Amazon's app market is more limited, but those limits come with the benefit of testing and screening by Amazon, for reliability and security. That might not work for people who are willing to spend time and take risks for more Android freedom and customability, but we're talking about different types of customers.
A walled garden, whether from Apple, Amazon or whoever, will always appeal to some customers, for convience's sake.
First and foremost, Amazon's most significant competition at this point is the Nook Color ("The Tablet for Readers" is the B&N tagline.) Rather than take on the iPad directly, Amazon will leverage their huge customer base (25 million Kindles shipped in 2011) to solidify their offerings in that space.
The seven inch form factor, though not yet a winner in the pure tablet space has been a huge hit in the eReader market. Moving to a 10" form factor effectively abandons that critical feature and leaves the combo eReader/Tablet market to the Nook.
The absence of a camera (if that turns out to be the case) doesn't surprise me. Smartphones routinely get bad reviews for their cameras and tablets get even worse reviews (iPad included). I'm not sure why Amazon would want to be dragged across the coals for a feature that most users don't care about.
The comments on the TechCrunch article from Android fans are, not surprisingly, heavily negative. But that view ignores the fact that Kindle fans (much like Apple fans) place a lot of trust in the Amazon brand. The fact that it doesn't use the latest Android platform (if that turns out to be the case) is largely irrelevant to those buyers. The miniscule proportion of the market for whom a true "Android" experience matters means very little to Amazon.
I am somewhat surprised that the Kindle 4 (or whatever it's going to be called) doesn't have 3G support out of the box (if, in fact, that turns out to be true.) The problem, however, is that 3G support on the Kindle is free. That will be impossible for a device that can be used for internet access on an ongoing basis so I suspect that Amazon is trying to work a deal with one or more cellular carriers that splits the difference between "free" 3G of the current Kindle and the $30 per month start/stop plan offered for the iPad.
As far as the price is concerned, I suspect that $249 is exactly right. It has become obvious that the sweet spot for smartphones is just about $200 (subsidized). A slight bump for a tablet that still puts it at half the cost of an iPad is about what I think consumers will expect. And Amazon has no incentive to undercut the price of the B&N Nook (which has sold very well) with a device with comparable specs from a much stronger brand.
The TechCrunch article implies that this is just one model in a larger Amazon tablet strategy (with a 10" model to follow in 2012.) I suspect that is true (though I'm not sure a 10" model is necessarily the next step.) Instead, I suspect that Amazon is banking on a combo backlit/e-ink display coming along in the next year, or so. (Doesn't matter much to folks like me but to a significant portion of the Kindle community the paper-like display of e-ink for reading is a crucial sales point.) That might be a 10" device, but I suspect that it would be even better in a 7" format.
Bottom line? From one perspective it's not going to be an iPad competitor. But Amazon doesn't need an iPad killer. They do need a "Nook Killer." And they need to begin to extend the Kindle product line in a way that supports a long-term strategy as the tablet market matures.
My brother swears he'd rather watch a movie on a 4.3 inch smartphone screen than a tablet. People are just different! I like Kindles, but before I had my iPad I had a nook. I liked reading on it but now prefer the larger screen on my iPad. Only thing I miss is eink. Definitely easier on the eyes.
Sent from my iPad using iPF
Black 16GB iPad 2 | Jailbroken via Absinthe
White 16GB iPhone 4S | Jailbroken via Absinthe
The $250 price is very reasonable, and becomes an even better value if it includes Amazon Prime fees.
I don't see that Amazon needs a "Nook Killer" anymore than it needs an "iPad Killer." One of Amazon's challenges is keeping customers happy as states try to tack on state sales taxes to Amazon purchases. And so, their strategy in coming up with new products and services, goes far beyond competing in the tablet market.
On the other hand, the Amazon product does offer an interesting challenge to the lackluster Android tablet market, and also offers a bit of a challenge to Apple's iTunes, especially if you can easily get music and video.