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Will Kindle Fire kill the $500 tablet?

Will the market impact of the $199 Kindle Fire be strong enough to reset the entire pricing structure of the tablet market? Even affecting Apple's seemingly impervious iPad?

Amazon's Kindle Fire will have hundreds of magazine titles.
Amazon's Kindle Fire will have hundreds of magazine titles. CNET

Will Amazon's $199 Kindle Fire reset the tablet market, rendering the $500 tablet obsolete?

Let me preempt any challenges from Apple iPad folks. Yeah, I know, Apple will continue to sell the iPad at $499, $599, and $699. And, yes, Apple is slated to ship more than 12 million iPad 2s in the current quarter. Android rivals like Motorola's Xoom or Toshiba's Thrive aren't even close.

With that out of the way, the most immediate impact will be on the pricey Android guys. "I think [the Kindle Fire] resets the bar," Carter Nicholas, CEO of market researcher eDataSource told CNET this week.

To expand on Nicholas' argument, why buy a $500 Xoom if you can get most of what you need from a $199 Fire or a $199 Samsung Galaxy Tab? Or a $249 Nook Tablet? Or a 10-inch Lenovo IdeaPad for $349.99?

But I'm guessing that the longer-term impact will be on Apple too, as immune as it seems today to price pressure--despite these results from a recent CNET poll (44 percent said they're sticking with the iPad).

We may not see the impact on Apple--the torchbearer for $500-and-up tablets--until late next year or even 2013, but it's as inevitable as the $999 MacBook Air. Remember, the MacBook Air started at the $1,800 to $3,000 price range and stayed in rarefied pricing tiers for a couple of years.

No, the iPad is not the Air but it competes with low-end laptops as well as the cheaper tablets. (Even the iPhone 4's pricing with a carrier contract is $99 now.)

And I think this will go beyond downstreaming old iPads. At some point, even a new $500 iPad 3 or iPad 4, not to mention a $700 one, is going to seem too pricey for iPad owners who aren't necessarily wedded to Apple products.

But until that day comes--however distant--here's the latest crop of alternatives to the iPad and pricey Android tablets. These tablets are already doing their part to hasten the demise of the $500 tablet.

Sub-$350 tablets:

  • Velocity Micro Cruz Tablet*: $99, 7-inch, Android 2.0, single-core processor, 12GB**
  • Amazon Kindle Fire: $199, 7-inch, Android 2.3, dual-core processor, 8GB
  • Dell Streak 7*: $239, 7-inch, Android 2.2, dual-core processor, 16GB
  • Nook Tablet: $249, 7-inch, Android, dual-core processor, 16GB
  • ViewSonic ViewPad*: $269, 7-inch, Android 2.2, single-core processor, 512MB
  • HTC Flyer*: $299, 7-inch, Android 2.3, single-core processor, 16GB
  • Acer Iconia: $329, 10-inch, Android 3.2, dual-core processor, 8GB
  • Lenovo IdeaPad K1*: $349, 10-inch, Android 3.1, dual-core processor, 32GB
*Price at Best Buy
**Includes 4GB and 8GB SD cards
And, as a footnote, independent hands-on reviews of the Kindle Fire are, at this point, nonexistent. So, we won't know how great--or not so great--it is until reviews arrive. For now, see CNET reader takes here and another demo here.

Update on November 13 at 2:00 p.m. PST: Best Buy offers the Motorola XOOM Family Edition with 16GB for $379 as of November 13.