Kindle Fire and Commoditization

I have read a couple of articles since the Amazon release of the Kindle Fire that seem to hint at a steady decline for Apple in an increasingly commoditized marketplace for its premium hardware. Amazon is seemingly selling its new tablet at a loss (or near loss) in order to push its ebooks and movie streaming, which leads us to the question of whether content or hardware is king...or is the answer more complex? A few pointed questions are worth posing:

• Do enough people want a tablet for ebooks and movies alone to supplant the iPad as the dominant player in the space? (This question rests on the fact that Amazon's Kindle Fire won't grant access to the full Android Market.)
• Do people buy the iPad for the top-notch hardware, or is it simply an acceptable medium for gaining access to good software and content?
• Is the iOS ecosystem better than the Android one? If so, how much better? If only marginally better, will Apple be able to win a battle in which prices are dropping and the Android OS is improving?
• Is the overall market for tablets and e-readers growing fast enough to accommodate multiple players in the space, and without making Apple skip a beat? (After all, moderate success is unacceptable for Apple, now the most valuable company in the world.)

Anyway, these are the questions that came to mind for me right away. It'll be interesting to see how this holiday season shakes out. I still say the iPhone 5 and the iPad 2 will be holiday favorites, but the Kindle Fire will certainly give the two-headed Apple monster a run for its money.