Will Kindle Fire HD Defeat the iPad?

Amazon's first tablet sold on price alone. Can a high-def screen give it an extra boost?

Now that the "new" iPad is in stores, breaking sales records, and supplying consumers with another reason to talk about the Retina Display, media hype is slowly shifting to other devices. And since Samsung doesn't have anything cool to announce, and considering how little people care for the tablet offerings from Sony

and other tech companies, it's no surprise that the greatest hype surrounds one key iPad competitor: the Kindle Fire. The latest rumor tells us that an HD version of the cheap tablet is on its way later this year. According to

, the Kindle Fire HD will come in two flavors: the standard 7-inch model and a new 8.9-inch offering. The latter will provide users with a full high-def screen (1920x1080), which would feature a pixel density of somewhere around 250ppi. The former would only come in at 720p (1280x800), and feature a pixel density of approximately 215ppi -- an increase above the original Kindle Fire, which comes in at 170ppi. That's the end of the rumor mill, which might leave consumers wondering if there will be any improvements to the Kindle Fire's processor, battery life, or overall capabilities. Considering that Amazon's first tablet was a cool but basic low-cost device, it is very possible that the upgrade could follow the same path. But is that what Amazon

needs to be successful? Last November, more than three million people purchased the new tablet, proving that consumers are hungry for a cheaper iPad alternative (even if it means sacrificing size, quality, and features in the process). But now that the new iPad is out, has the highest-resolution display available, and 4G LTE services from Verizon

and AT&T

, you have to wonder how much consumers will be willing to sacrifice the second time around. If the next seven-inch Kindle Fire is sold for $200, and the larger model clocks in at $250 to $300, how much are consumers really saving? Many have referred to the Kindle Fire as a content device that was built for those who want to purchase anything and everything that Amazon has to offer. The same could be said for the iPad. But out of the box, Apple's

tablet – even the original iPad – was a snazzy, sexy, and fun-to-use device. Sure, it's more fun with video game apps, iTunes movies, and a Netflix

account. But it was still fun to pick up and play around with. You could surf the Web, view YouTube videos, stream movie trailers, and entertain yourself with a zillion other free things. While the same is

true for the Kindle Fire, it's just not as cool, as seamless, or as fun to use. It feels cheaper, isn't as responsive, and does not do anything the iPad can't. Therefore consumers who settle for the Kindle Fir are essentially buying the device not because it's in any way better (or comparable, for that matter), but because it is cheaper. To be fair, Amazon accomplished a lot with the first Kindle Fire. First, it proved that you don't have to be Apple to make a popular tablet. Second, it proved that a newcomer can enter the market and make waves overnight. Third, it showed that Samsung isn't Apple's only significant competitor. Going forward, Amazon faces the challenge of deciding which market it wants to tackle next: the low-cost tablet market that it currently owns, or the high-end market it will never be able to win. If the company prices the next Kindle Fire too high (anything above $250), the online retailer will essentially price itself out of the low-cost market. This would raise consumer expectations and require Amazon to add a plethora of new (expensive) features to entice buyers. But if it prices the tablet below $250, Amazon won't be able to add much to the device, thus making it no more attractive than the original Kindle Fire. One solution would be to drop the price even lower (who wouldn't buy a seven-inch Kindle Fire 2 if it were sold for $150?), thus making it much more appetizing. Another solution would be to offer something no one else does, like a 20-hour battery life. That isn't likely to happen, as it would raise the manufacturing costs to what Amazon and other tech companies may perceive as being an unreasonable level. But it would also give Amazon an impressive edge in the tablet battle. If Amazon were to get an edge – with a lower price or some exclusive feature – it would still have a very difficult time penetrating the iPad market. Amazon can fight to sell as many tablets as possible to consumers who are not interested in buying an iPad. But if Amazon expects to convert iPad

to Kindle Fire

, it's going to need to offer something truly special.