The point of all this, is there may well be several untapped niches yet for people looking for just the right form factor for them.  It needn’t be an ipad killer, or a kindle killer, or anything else. It just needs to appeal to those people that haven’t yet found the reader that makes them happy.

Amazon know they need to build an ecosystem.  They’ve done it already with the original Kindle.  Sony has been making very nice e-ink hardware for years, but Amazon built what mattered, the store, and took care over the customer experience.

If the delayed release of the 10-inch tablet isn’t due to quality issues or something, they’ve probably made a strategic decision, because they know they can’t yet answer the question “Why buy this instead of an iPad?”  But the 7-inch tablet is cheaper than an iPad, and a useful upgrade from the existing Kindle: for a slight cost increase you get access to video, music and apps, including games.  This will sell, not to most potential iPad buyers, but this will sell.

And if it sells well enough, the Amazon ecosystem will get the content it needs to challenge Apple with a 10-inch model in 2012.

Fact of the matter is, in order to enter the tablet market successfully, you’re going to have to appeal to Apple customers, plain and simple. iPad IS the tablet market, both literally and metaphorically. This will work in Amazon’s favor, because we all know people don’t buy an iPad because it has the fastest dual core CPU, most RAM, and most built in storage. People buy it because it’s the best hardware/software integrated tablet experience to date.

To spell the demise of the Amazon tablet because it doesn’t have Honeycomb contradicts the fact that Honeycomb isn’t penetrating the market well. If you really think about all the adoption hurdles of a Honeycomb tablet through the eyes of a potential Apple customer, you would come to the conclusion that building a specific instance of Android mated to hardware designed to run it perfectly would be your best hope for competing with the iPad.

The iPad will not be brought down by a 3ghz dual core Ice Cream tablet made by Samsung, Toshiba, etc. It will be brought down by a company with access to a HUGE loyal, customer base, that brings another smooth user experience from end to end, regardless of hardware specs or software version. 

If every nerd on the planet bought a tablet, it would still pale in comparison to the non-techie group that buys the in the tens of millions. These people don’t care about specs, they care about experience. If the new Kindle delivers the experience, it will sell like hotcakes.