Is the Apple Experience really worth the $200? [Kindle Fire HD 8.9 vs iPad 3]

The new Amazon Kindle Fire HD (8.9) blows the third generation iPad out of the water. Not only the Kindle Fire HD is lighter, thinner and a bit smaller than the iPad 3, it’s a full $200 cheaper than the entry level iPad 3 (16GB). The price difference jumps to $230 if you compare the 4G LTE or 32Gb models. The Kindle Fire HD (8.9) packs a 1920×1200 (254 PPI) Retina-equivalent screen, dual stereo speakers with Dolby Digital Plus and a MIMO antenna capable of 31Mbps along with other solid specifications.

For a start, This price difference gives you an overview of Apple’s ridiculous profit margins and also exemplifies the discrete direction Amazon is heading towards. The 16Gb WiFi-only iPad 3 costs $300 to build and the 16GB Kindle Fire HD 8.9 probably costs around $300 to build as well, given its slightly inexpensive materials and Amazon’s weak supply chain. So how does Amazon make money from the Kindle Fire? Instead of making an enormous profit on every Kindle Fire, Amazon instead chooses to sell its tablets at cost price, relying on aftermarket goods (Movies, e-books, TV shows, music, Prime) to turn a profit. For this system to work, Amazon has to sell lots of Kindle Fire’s, but since Amazon has sold over 6 million first-generation Kindle Fire’s in 9 months in the United States, easily outselling every tablet in the market except for the iPad, I don’t think Amazon will have any issues in selling millions of second-generation Kindle Fire’s.

The first-generation Kindle Fire didn’t go up against the iPad, although it was a inexpensive, solid 7-inch tablet device – perfect Christmas present for someone who was contemplating about getting a tablet, but didn’t want to spend $500 for an Galaxy Tab or iPad. The Fire HD, with swanky speakers, a stunning display, and lissome form factor, is indubitably targeted straight at the iPad.

Amazon Kindle Fire HD 8.9 vs. Apple iPad 3

Kindle Fire HD 8.9 iPad 3
Price (WiFi, 16GB) $299 $499
Price (4G LTE, 32GB) $499 $729
4G data plan $50/year $200/year
Screen size (inches) 8.9 9.7
Screen resolution 1920×1200 2048×1536
RAM 1GB 1GB
Thickness 8.8mm 9.4mm
Weight 575g 652g
OS Android 4.0 (modified) iOS 5.1
Processor Dual-core OMAP4470 @ 1.5GHz Dual-core A5X @ 1GHz
Wireless connectivity MIMO Wi-Fi (802.11a/b/g/n), Bluetooth WiFi (802.11/a/b/g/n), Bluetooth
Camera “HD” front-facing camera 8MP rear, VGA front-facing
Video N/A 1080p (rear)
Speakers Dual stereo speakers (with Dolby Digital Plus) Single mono speaker
Battery Unknown (probably 8 hours) 10 hours

In terms of hardware, the iPad 3 does have a tad larger and higher-resolution display, but the Fire HD has a better display, in terms of glare, contrast, and etc. There’s hardly any difference when it comes to display anyway, though the Fire HD is 0.8 inches smaller, the sharpness and quality is virtually indistinguishable. The iPad 3′s A5X system-on-a-chip (SoC) is equivalent to the Fire HD’s  OMAP4470 by Texas Instruments, with the iPad 3 probably having a slight superiority on GPU performance. There’s no rear-facing camera on the Fire HD (rarely anyone uses a tablet to snap pics) though the Fire HD has better sound quality and wireless connectivity in exchange.

Speaking of software, the Fire HD runs a modified version of Android 4.0 (Ice Cream Sandwich) while the iPad runs iOS 5.1 (iOS6 upgrade coming soon). Frankly speaking, iOS has access to more apps (500K vs. tens of thousands available for Fire HD), but the Fire HD has access to most of the essential apps, including Netflix, Skype, HBO Go, and of course Angry Birds along with many others. When it comes to other kinds of content, like TV shows and movies, Amazon is the best of all.

We can compare the software and hardware specs until hell freezes over but eventually it all boils down to this: Is the $200 price variation large enough to influence would-be shoppers away from the iPad? Is the Apple Experience worth $200? Well, for existing tablet owners (most of which own an iPad), it’s hard to say; they’ve already been swallowed into the app ecosystem, stuffed up their iCloud with all their data, and sipped the Jobsian Kool-Aid. It would cost a lot more than $200 to make me go over from Android to iOS or Windows to Mac. For new customers, though (remember, the enormous majority of consumers are first-time tablet buyers), saving $200 is a big deal. For $200 you could buy two years of Netflix, or you could buy your child his own brand-new 7-inch Kindle Fire HD.

The tablet market is growing very quickly and it’s very hard to predict the outcome. Google, Apple, Amazon and Microsoft all have different visions but at the moment, all they can do is draw customers. Amazon knows this very well that tablet could be the next big thing, and if it takes just a $300 at-cost tablet to secure users into the Amazon Experience, that’s a diminutive price to remunerate.

It’ll be very interesting to see how Apple reacts to the Fire HD and other inexpensive tablets. Apple’s been very happy with low market share and high profit margins, but I don’t think they will sit quietly.

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