Can Apple Inc. (AAPL) Survive a $99 Kindle Fire Tablet? – Amazon.com, Inc. (AMZN)

The hills were alive yesterday with the sounds of $99 Kindle Fire HD tablets.

TechCrunch’s report that Amazon.com, Inc. (NASDAQ:AMZN) is producing a high-def tablet that will hit the market later this year at a $99 price point turned heads. An Amazon rep denied the report, but it’s not as if it would come as a major surprise if it did actually happen.

The original Kindle e-reader hit the market at $399 six years ago, and now the latest generation is available for as little as $69.

The original non-HD Kindle Fire hit the market at $199 less than two years ago, and it’s already at $159 — with a Cyber Monday sale this past holiday season that temporarily marked down the device to $129.

Technology gets cheaper over time, especially as a company aims for the mainstream market. It wouldn’t be a surprise to see a somewhat scaled-down Amazon tablet break below the $100 barrier. There are actually a few 7-inch Android tablets selling for less than $80 on Amazon.com itself right now. Google Inc (NASDAQ:GOOG)‘s Android is an open source platform, so it’s really just a matter of working with suppliers to get the components that are cheap enough to work. If the obscure Zeepad, Coby, and Chromo can pull off sub-$80 gadgetry, why not Amazon.com, Inc. (NASDAQ:AMZN) with the vibrant ecosystem of digital media to sell after the initial sale?

If anyone could subsidize a $99 tablet, it would have to be Amazon — but what would this mean for Apple Inc. (NASDAQ:AAPL)‘s iconic iPad?

Passing the torch
Android became the top dog in smartphone mobile operating systems a couple of years ago, but it’s taken longer for Android to overtake iOS when it comes to tablets.

Apple Inc. (NASDAQ:AAPL) was strong out of the gate. The $499 price point was aggressive enough that the first wave of similarly sized tablets merely matched the tech giant’s price point. By the time the world realized that there was a legitimate market for tablets, the iPad had a seemingly insurmountable lead.

Schools went iPad. Restaurants went iPad. Gadget blog Electronista is reporting this week that the Department of Defense has a pending purchase order for Apple hardware including 220,000 iPads that will kick in at the end of the sequester.

The iPad has become to tablet operating systems what Microsoft Corporation (NASDAQ:MSFT)‘s Windows is to the PC market — Apple’s platform is the safe and popular choice. Why risk straying from iOS?