Steve Jobs had famously once proclaimed that competitors’ 7 inch were “Dead on Arrival,” citing that tablets should have a minimum 10-inch screen for optimal user interface experience (see Do 7-Inch Tablets Stand a Chance?). Part of this stemmed from the fact that the 7-incher is a tweener – too big to be a smartphone and too small to be an effective tablet. If Amazon indeed comes up with a 9-inch tablet, it will be a significant design change from the current 7-inch version, and may pump up Kindle sales even further.
Given the price difference historically between iPads and Kindle Fires, the Kindle Fire could stimulate additional tablet demand at the lower price points while taking some potential iPad converts.
This may ultimately drag on the momentum we have come to expect with new iPad launches. We discussed the impact the iPad 3 could have on existing Kindle Fire sales in our note Can the iPad 3 Kill the Kindle Fire?