Amazon has just announced their long rumored Kindle Fire tablet.  For $199 Amazon presents a 7 inch tablet based on the Android platform.  It will play music, show movies, run apps, and -- of course -- let you read Kindle books.

The announcement is only a few hours old, but my initial reaction is that the Kindle Fire may be a slight misstep by Amazon.  Here's why:

• I'm not a fan of the 7" form factor. It's still too big to fit in your pocket, yet too small to read for long periods.  It's smart to not try to tackle the iPad head-to-head, but the odd size adds no value.
• No 3G? The trend it to be more mobile, not tied to locations. Even in large cities WiFi coverage is very sporadic.
• No camera. This was the biggest complaint on the original iPad.
• No microphone = No Skype.
• Amazon Silk.  This one is scary.  The idea is that Amazon will make web browsing faster by doing some of the work in the cloud to pre-render the page and send it to the tablet.  Sounds good on paper, but what it really means is that the Kindle Fire will tell Amazon.com about every web page you view.  Privacy concerns anyone?

On the bright side, the price is fantastic.  $199 is a point where you'll attract a lot of consumers.  Unfortunately, the Kindle Fire feels like a product where they started with a price, then worked their way back to figure out which features they could afford.  That results in lots of compromises.

Without seeing the device in person it's hard to tell if the Kindle Fire has the wow factor that may lure people away from the iPad.  The Amazon name has a lot of brand recognition, and their success with the Kindle shows they can go toe-to-toe with the big boys in the consumer electronics industry.  I'm guessing the Kindle Fire will sell well this Christmas, and eventually settle as the #2 consumer tablet.  It's far from an iPad Killer, but for those willing to sacrifice features in exchange for price, it's a reasonable choice.