You Can't Fight Fire With Apples

So (NAS: AMZN) has raised the curtain on the latest "iPad killer," its new Kindle Fire tablet. With inferior processing abilities and technical shortcomings, the Kindle Fire simply doesn't bring the heat, and the two devices will never be equal rivals. But then again, Amazon never intended them to be.

Comparing Apples to Fire
The Kindle Fire's $199 price tag is far less than the cheapest iPad. But the truth is, you get a lot more for your money with Apple's (NAS: AAPL) device. Even though it costs more than twice as much as the Kindle Fire, the iPad is also twice the machine.

For starters, Amazon's tablet lacks the iPad's A5 processor, its two video-enabled cameras, and its 64GB internal storage capacity. The Kindle's smaller display and lack of a microphone make the device far less user-friendly.

Beyond this, Apple uses the latest screen technology in the iPad and lets users connect by 3G networks. By contrast, the Kindle Fire has your run-of-the-mill backlit LCD screen and provides no 3G access, thereby shackling its users to Wi-Fi hotspots. How 2010 indeed!

Getting it right with strategy
If you read between the lines, however, Amazon isn't counting on tablet sales, per se. Instead, the Kindle Fire is aligned with the company's strategy of generating big sales by charging small prices -- a strategy that has paid off nicely for the Web giant.

The Fire runs on Amazon's rendition of Google's (NAS: GOOG) Android software, which, not coincidentally, ties in neatly with Amazon's digital shopping hub of music, books, videos, and other goods -- where the company hopes to make its real profit.

The company's cloud capabilities also up the ante on the Fire's tablet strategy. Amazon's new Silk Web browser integrates with its Elastic Compute Cloud to speed up Web page loading times. In addition, the cloud-accelerated browser makes up for the tablet's lack of memory by providing free cloud-based storage for all Amazon digital content -- meaning your Amazon e-books, films, and music are stored in a computing cloud and streamed to your tablet for instant viewing.

Coming in hot
Although the Kindle Fire is not the iPad killer it was made out to be in some corners of the media, its ability to connect more users to its digital content will undoubtedly make it a win for Amazon.

Not only will the Fire be the final blow to Hewlett-Packard's (NYS: HPQ) TouchPad and sink sales of Research In Motion's (NAS: RIMM) PlayBook tablet and Intel's (NAS: INTC) Oak Trail processor chip, but it will also probably increase interest in Amazon's digital products and cloud-based services.

Consequently, if you're in the market for a tablet computer, the iPad is the obvious choice. If, on the other hand, you want a handheld e-reader with cloud capabilities, then the Fire is for you.

Tell me in the comments section below why you're supporting Team iPad, Team Kindle Fire, or both.

At the time thisarticle was published Fool contributor Tamara Rutter owns shares of Apple. Follow her on Twitter, where she goes by@TamaraRutter. The Motley Fool owns shares of Google, Apple, and Research In Motion. Motley Fool newsletter services have recommended buying shares of Google, Apple, and, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

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