Amazon CEO Jeff Bezos and the new Kindle Fire at NYC launch ((Portfolio/J.D. Harrison)

Instant feedback: Read what people are telling Amazon they think about Kindle Fire.

Now that Amazon has officially announced its Kindle Fire tablet, the question on everyone's lips is, "Will it really be an iPad killer?"

The 7.5-inch device is certainly a charmer. Weighing in at 14.6 ounces -- less than half the weight of the 1.3-pound iPad -- and running on a souped-up version of Google's Android operating system, with a zippy Web browser and access to all of Amazon's diverse entertainment content, the Kindle Fire has big potential.

But the tablet is considered only an entry-level device, due to serious technical limitations, in contrast with Apple's fully-loaded iPad. The WiFi-only Kindle Fire lacks 3G access, a camera and the ability to create and edit documents on the device, though users can import PDF and Word files onto the device through an email client. Users also will only have access to curated content from Amazon's Android Appstore, which offers a significantly smaller pool of apps than Apple's App Store.

Despite the Kindle Fire's limitations, with a $199 price tag that's less than half that of Apple's $499 entry-level iPad, analysts say the device will make a splash this holiday season.

Analysts with J.P Morgan say they expect Amazon to sell 4 million to 5 million Kindle Fire tablets during the upcoming holiday season, mainly due to the low price point, which is below the $250 price tag analysts were expecting.

But will a Kindle Fire be enough to catch a red-hot iPad?

Click on the photo for a Kindle Fire slideshow

(Read a letter from Jeff Bezos to customers on Amazon.com's home page).

According to research from Gartner, Apple's iPad is projected to account for 73 percent of worldwide media tablet sales in 2011, That is down from 83 percent share in 2010. Gartner said that beyond Apple iOS and the Android operating system, no other platforms are expected to have more than 5 percent share of the tablet market in 2011.

Gartner made its projection before Amazon launched Kindle Fire, but -- like the rest of the world -- was aware of Amazon's plans to unveil a new tablet, which turned out to be four devices.

"By introducing three new Kindle eReaders ranging from $79 to $149—and launching the Fire at $199—Amazon is both recognizing the market opportunity for single-purpose devices at the low end and also defining a new price point for low-mid level tablets," according to a statement from J.P Morgan.

Beyond that, sales of the Kindle Fire "will be driven by strong integration with Amazon digital media products, heavy home page marketing toward Amazon's large existing customer base in the U.S., and lack of compelling alternatives to Apple's iPad," J.P. Morgan said.

With its $199 price tag, though, Amazon is likely losing money on Kindle Fire, according to Gene Munster, an analyst with Minneapolis-based Piper Jaffray, according to the Minneapolis-St. Paul Business Journal.

Jeff Bezos is betting Kindle Fire can compete with iPad (Portfolio/J.D. Harrison)

Analysts were bullish on the Kindle Fire immediately after Wednesday's launch. But some, like J.P. Morgan, noted that the Fire is only an entry device into the tablet market. What's lacking is a larger screen -- one at least 10 inches, rather than the current 7-inch offering.

Some have suggested the Kindle Fire is better considered a rival to the Barnes & Noble Nook Color e-reading tablet or Apple's iPod Touch. Critics say without the ability to create and edit content, the Kindle Fire is better considered a media tablet that can also be used for shopping and surfing the web.

Amazon has opened the doors to feedback on the new device, and consumers are already weighing in.

"If I cannot edit documents in the Fire, or have 3G to access materials when out of wifi range, I would look at the Fire as a media player and ebook reader- nothing more," said reviewer M. Sarkar.

However, the Fire is likely just the beginning for Amazon and a 10-inch, fully-equipped tablet could be on the market as soon as next year. Though the WiFi-equipped Fire has no 3G connection and no camera -- which makes it a weak option for customers who want to do video calls and chats, say analysts -- the Fire is equipped with a number of key features that appear ripe for a transition into a fully-fledged tablet.

One of the features that could translate well to a larger tablet is the company's Amazon Silk product, a new kind of split browser, which partially lives in Amazon's EC2 cloud and partially lives in the Kindle Fire. Amazon Silk will take advantage of the "incredible computational horse power of EC2" to speed up Web browsing, a challenge for most mobile devices, said Amazon CEO Jeff Bezos at the launch event Wednesday.

Al Hilwa, an analyst with IDC in Seattle, said the split-browser architecture is not new. But he said Amazon's strategy is an "interesting spin on the me-too Android software we have seen so far, and possibly a game changer" in the competition with Apple and others in the tablet game.

"There has to be something in the coffee in Seattle – what an inspired idea this cloud-backed mobile browser is for Amazon," Hilwa said in a note Wednesday. "In one fell swoop Amazon harnesses its commanding lead in cloud services, the content richness of a leading online retailer and its successful Kindle business strategy to deliver what might become one of most effective antidotes to the mobile bandwidth crunch."

Kindle Fire owners will also have access to Amazon's entire content library, including movies and TV shows, songs, books, magazines and apps, with any purchased content back up up remotely on Amazon servers for free (though only 8GB for other content). Bezos also got in a little dig at Apple at the event, highlighting that this will happen wirelessly, in contrast to the iPad, which requires a USB cable.

The device also supports all video formats, including Flash, which Apple has refused to support.

Like Apple, Amazon has an advantage with customers who have a rich experience with Amazon already. They have shopped online with the e-commerce giant, made Kindle a holiday gift-buying blockbuster and also relied on Amazon to watch their favorite movies.

Spencer Wang, an analyst with Credit Suisse, said Kindle Fire is geared toward driving more Prime subscriptions. He noted that Fire does not come bundled with Prime, but Amazon is offering one month of the instant video service for free with a Kindle Fire purchase.

Wang said that Kindle Fire also gives Amazon another way to sell non-media goods to a captive audience.

The Kindle Fire hits shelves Nov. 15.

Related TechFlash coverage of the Kindle Fire launch:

Amazon Kindle Fire tablet priced at $199, ready to rival iPad

‘Fire is Born' - A first look at Amazon's Kindle Fire commercial

Microsoft to benefit from Amazon Kindle Fire tablet?