The Kindle Fire is turning heads at $199.

SEPT. 29, 2011 • Amazon.com introduced its Kindle Fire tablet. The unit is the online retailer’s first color touch-screen model that comes with a seven-inch screen, and wifi connectivity for $199. Fire uses a substantially altered Android system that optimizes access to Amazon’s digital and hard products.

Impact: At $199, the Fire is a scary device. HP discovered how well that price point resonated with buyers when it gave up on its new tablet in less than one month in release. There is a significant market for a quality tablet at $199, however. Amazon has the capital resources, and content library, to subsidize a tablet at this price where a company like HP does not. That makes the Fire the biggest thing in tablets since the iPad. Yet this device is scary for another reason. No other system out there will have the wealth of user data to collect and exploit that the Fire can to transmit back home to Amazon. In terms of targeted marketing, that is a windfall that will more than make up for the Fire’s low price.