Close your eyes. Imagine a world where a $200 tablet behaves like a piece of technology that costs… $200. Open your eyes. Say hello to the Kindle Fire.

Remember when everyone was sure that Apple’s tablet was going to cost around $1,000? That was 18 months ago. We’re spoiled. The fact of the matter is that the iPad behaves like a piece of technology that should cost more than $500. Apple set the bar very high.

It’s going to take the competition a while to catch up. With most things in life, you get what you pay for.  

The Kindle Fire reviews are pouring in. Overall, the consensus seems to be that the device is very solid for the $199 price.

But with that low price point come trade-offs. So no, it’s not an “iPad killer”. 

I haven’t played with one yet (aside from a near-complete prototype a few months ago), but I’m gonna hold off on getting one for now. Why? Because I’m fairly certain that Amazon will have a better one out there soon — maybe just a few months from now. 

I did just put in my pre-order for a Kindle Touch though. My Kindle was three years old and accumulating fingerprints from the number of times I tried to turn the page by touching the screen. It was time for a change. 

The most interesting aspect of the Kindle Fire remains Android. This is going to quickly become the most popular Android tablet on the market. But it doesn’t look like Android at all. Google’s fingerprints are nowhere to be found.

Google can say all they want about how that’s a “win” for the ecosystem and for “open” — but this has to piss them off. 

A few quick thoughts:

1) Barnes & Noble makes fun of the Kindle Fire, noting that it looks like a BlackBerry PlayBook — completely fair and true. The Nook Tablet clearly looks nicer. 

2) But… the Kindle Fire is still at the magical $199 price point, while the Nook Tablet is at $249. The fact that Barnes & Noble wouldn’t match the $199 price shows you just how insanely low that is — and how aggressive Amazon is willing to be to win. 

3) The $50 price gap may not seem like a huge difference but remember that the Nook Tablet also doesn’t have a little thing called Amazon.com and all its related properties.

4) The Nook Tablet specs sound great, but again, it’s $50 more and doesn’t have Amazon.com. Further, at $249, the tablet clearly isn’t going to be good enough to match the iPad. So Barnes & Noble may feel a bit squeezed. They’re not the cheapest and they’re not the best.

Amazon is predicting record Kindle sales next quarter, just as Apple is predicting record iPhone and iPad sales next quarter. But there’s one key difference.

As a result of those record sales, Apple could see a $40 billion quarter in terms of revenue — that will undoubtedly lead to record profit. Meanwhile, Amazon, even with record sales, is warning that their numbers could dip. They may even lose money next quarter. Possibly a lot of money.  

Apple is going to set records for their two most financially successful products. Amazon is going to set a record for a product that they may actually lose money selling. 

Apple and Amazon play in the same general space now, but they play in that space in the exact opposite way of one another. 

Apple’s model clearly works in this space. Amazon’s model? We’ll see. Remember, they’ll be competing with Apple on the price of much of their digital content as well.

The ability to upsell Amazon Prime may end up being the key here…

Update: And a good follow-up tweet from Michael DeGusta:

…and next quarter Apple will actually report their iPhone/iPad sales while Amazon will not report their Kindle sales.

Amazon has never reported actual Kindle sales numbers in their earnings statements. It’s very odd. They always talk about setting sales records, but they refuse to back those claims up with any actual data. It’s like bragging you’re the best at something but when asked why that’s the case, you respond with “just because”. 

Maybe Amazon will change this odd trend and actually report tangible numbers in the holiday quarter.

Update 2: As a few have pointed out, the wording in The Next Web’s post is a bit confusing. They talk about decreases in revenue, but it would seem they actually mean net income (with revenue growth not quite lining up with record sales growth). I’ve tweaked my wording to make this more clear.

As always, profit is the key here — it’s the money you get to keep. Again, with their record revenue, Apple will undoubtedly also see record profit. But with their own massive revenue, Amazon may actually lose money next quarter. Their release indicates that Q4 income could be anywhere from a $250 million gain to a $200 million loss! Think about that for a second. That’s pretty crazy.