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Everyone seems to want to compare the upcoming Kindle Fire to the iPad, and in such a comparison the Fire loses big-time: no camera, no microphone, only 8 GB of memory, a smaller screen (with higher resolution, though), limited number of apps available, etc. etc.

The deal is, the Kindle Fire shouldn’t even be called a “tablet” or be placed in that market. The Fire is really a dedicated delivery device for Amazon services – without Amazon and the Amazon “cloud” the thing has almost no functionality. And that’s not a bad thing.

As with the earlier Kindles the user can put their own content on the Fire: PDF files, audio files, video files, etc. But with that limited memory you aren’t going to be putting a lot of audio and video on the thing. The Fire is a home wireless appliance. Amazon wants us to use it to purchase their content and access that content from the cloud. The Fire requires that the user make the full leap to keeping your stuff on someone else’s hard drive somewhere. It’s yours the way the TV shows you watch on cable are yours: Yeah you can put them on the DVR, but only so many of them at once; you can put them on the Fire the same way.

What changes is the sales model. Amazon will ultimately make a lot more per-user than the cable company does because you have to pay for each “piece” of content when you buy it. You pay nothing for the actual service that delivers it. You are buying user licenses here.

Yes, you can put content on external storage and load it in via an external device, and that might be a good move for book fanatics such as me, who have a large collection of non-DRM content. But Amazon is betting most people won’t do that. Amazon is betting we’ll get hooked on the cloud, and that the device in our hands will become transparent – we’ll be in the cloud-universe of content, and if we have a really good Internet connection we will barely notice the little pauses it takes to stream data to us. This is one reason they made sure to put a capable CPU in the Fire. The Fire must be able to manage data streaming and app execution seamlessly at the same time.

For me, I’m not in love with the idea of reading on a back-lit screen. I want the Fire primarily as a Web surfing tool to keep up to date on news and other presented information that you don’t really interact with. I’m very interested in its ability to display color magazine and PDF content. And I like the idea of being able to stream video from news sites, YouTube, etc. But I doubt I will watch movies on it. I doubt I would watch movies on any device with a small screen. I’m into the large screen and large sound I get in my living room.

The Fire represents a very narrow marketing strategy: make it easy for people to buy stuff from Amazon, and give them Web browsing as part of that. I do buy ebooks from Amazon and will continue to do so. But I suspect I will still do most of my reading on an eInk screen. The Fire is a device for having around the house when you want to check something on the Web, browse in a magazine, and catch up on news. I can see it sitting on the coffee table, available for anyone in the room to use for quick Web searches or to spend a half-hour flipping through a magazine or newspaper. You aren’t going to get any work done on this thing.