Amazon can subsidize a tablet via its Prime subscription service and media sales.
Movie, music and e-book services can be bundled into one comprehensive offering.
Amazon is one of the few companies that can provide integration similar to what Apple offers.
But Amazon's Kindle Tablet is also about defense. The reality is that Barnes & Noble's Nook is one popular Android tablet. While other companies have tried to launch direct iPad rivals, Barnes & Noble went the hybrid route. The color Nook is a handy Android tablet/e-reader.
Stifel Nicolaus analyst David Schick said in a research note that the Kindle Tablet is a chance to "return serve with refreshed devices." It's unclear whether Barnes & Noble can ultimately compete with Apple and Amazon, but it has fared well with its Nook color. The biggest threat to Barnes & Noble will come if Amazon aggressively subsidizes its Kindle Tablet to hit the sub-$200 mark.