Amazon released its Kindle Fire HD last November and this week it slashed the price by $30. That’s a bad sign. Yet Kindle Business President Dave Limp cheerily explained that cost efficiencies in manufacturing were simply being passed along to Amazon customers.

Limp’s excuse sounds nice, but this is really about brand preference.

The Kindle Fire HD was already one of the most inexpensive eReaders on the market. This price reduction is a sign of poor sales.

Kindle’s main competition, of course, is the pricier Apple iPad. It’s odd that even a $100 difference between the iPad and the Fire was not a large enough price incentive to trigger Kindle sales.

Clearly, Kindle is thinking that $130 will drive customers to the cheaper alternative.

The Kindle brand is relatively successful but the dramatic price cut is a troubling sign of problems. Customers will almost always pay more for brands with meaning.

Amazon’s Kindle Fire is experiencing difficulties that probably have nothing at all to do with cost.

To no one’s surprise, Microsoft will be releasing its own line of tablets, called Surface, and, while its tablet cover/keyboard is a pretty darn cool spin on things, I am not sure how the actual tablet will do. My issue with tablets is that Apple has, for all intents and purposes, done so well on its first go-around that the iPad has become synonymous with the category. The same can be said for the likes of Thermos or Kleenex, the brands so engrained in the markets their brand is often interchanged as the product itself.

So far, some manufacturers have tried their hand in the tablet market, but they seem to fight over the scraps and never make up ground against Apple. So far, there has been Sony, Samsung, Amazon, Dell and a few others. Some of them are better suited and have more brand permission releasing a tablet than Microsoft.

The tablet comes at a time when Microsoft is making some nice strides that can set it apart. It new Smart Glass is one of those things. It is fresh and, with additional “like” offerings, Microsoft is setting a foundation on which it can create a rebranded image for the company.

Tablets, however, are another story. This late in the game, you aren’t seen as being terribly innovative if you come out with only slight modifications (especially by one considered to be a software manufacturer that often makes things complex or, to be snarky, came out with Zune). You have to defend your product against an overwhelming category leader that has the best brand in the industry (in the world, really).

For Microsoft, there is some opportunity in the tablet market if it can find the highest emotional intensity and align itself with it it to give consumers the switching trigger they need to make the jump. Unfortunately, I think the market leader already has it.

There are a lot of things I see Microsoft doing that feel right, but tablets feel wrong. To regain some of the clout, it needs a game-changer.

Even though there are aspects if it that are cool, this ain’t it.

Last week, I wrote a blog that focused on the upcoming release of Amazon’s new line of Kindles.

At that time, I speculated that Amazon, by releasing its new e-readers at a lower price, had made a very wise branding decision. Additionally, I felt that the strength of its brand, in conjunction with the release of a covetous product at an affordable price point, was going to give them a definitive share of the e-reader market.

It seems as though my hypothesis may have been dead on the money. Now that the pre-orders for the Kindles are being reported as high, Amazon is poised for a breakthrough product release.

This is wonderful news for Amazon, but near tragic news for Barnes & Noble — which may soon be destined to take the route of Borders (that of bankruptcy). That is, if it does not come up with a conclusive re-branding strategy very soon.

Sadly, the proof may already be in the pudding for Barnes & Noble. Since the announcement of the new line of Kindles, many recent investors in Barnes & Noble are now selling their shares and, in turn, the stock price is taking a free-fall. What makes this worse for Barnes & Noble, is that its primary lifeline, the Nook, is now being undersold by Amazon (Amazon is selling a $79 and $99 models as well as a $200 color version of the Kindle and the competing products are just as intuitive and offer more reading content.)

So far, the lower price point is working for Amazon.

The rumors are awhirl that the Kindle Fire is being pre-ordered at a record-setting pace for Amazon. If these leaked documents are true, 250,000 Fires have already been pre-ordered. By the time of the November 15 street release, Amazon could potentially sell 2.5 million units. That could make cripple the already hobbled Barnes & Noble brand.

Looking at the bigger situation, Barnes & Noble maintains the ability to be the last of its kind — a traditional bookstore. But truth be told, bookstores are a dying breed. Much too often, I popped into our local Barnes & Noble to scout out a new book, only to find it was not available from the store clerk. When offered, “would I like to order,” my reply is always, “It’s okay, I can just get it on Amazon.”

If Barnes & Noble doesn’t rethink its model and rebrand Nook so it has more meaning, soon, “getting it on Amazon” may be the only option.

Amazon has just made things interesting.

Today, in my daily quest to find new electronic gadgets, I stumbled across the news that Amazon has boldly announced their new line of Kindle devices — four devices to be exact.

Posted on Amazon are the upcoming $79 Kindle, the Kindle Touch Wi-Fi and 3G, as well as its most interesting product of all, the Kindle Fire. The Fire is Kindle’s response (albeit a rather late one) to both the iPad and, more directly, the Nook Color.

This all made me wonder, wouldn’t these devices really have been something two years ago? You know, before they were essentially created by Apple and Barnes & Noble?

Instead, Amazon is now trying to make waves by promoting products that can be, at best, second place in their respective categories. And I believe Amazon realizes this too.

Why?

Posted on the lead page of Amazon’s website is a letter scribed by its billionaire CEO, Jeff Bezos. The opening of Bezos’ letter reads:

There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp.

Interestingly, in order to gain market share in this already dominated market, Bezos wants to play the game of price and essentially own the position of having the most affordable and well built e-reader and tablet on the market. That’s something no one really is doing right now. This is also, in my estimation, the only shot Amazon has to gain market share.

Just think about it: Amazon’s Fire will always be a second-class citizen to the iPad. Take a look at the specifics — it is built to be a multi-purpose touchpad (which certainly is far from unique these days) and its screen shots show similar layouts to that of iBooks and iTunes apps. You can watch movies, listen to music, read PDF’s and check your e-mail on it too. Basically, Amazon has created the iPad for those people who can’t afford an iPad. And they’ve acknowledged this by letting customers know that their product is affordable.

Also, should you visit the purchase link for the Fire, Amazon has written: “Pre-order now to reserve your place in line.” Suggesting to customers that the Fire will be a big-time seller in the market place.

A microcosm of this scenario can also be seen with Amazon’s release of the $79 Kindle. Here, Amazon, through price alone, is now contending for the second place position behind the Nook’s second generation E-Ink reader. Its hope is to increase market-share by selling more of a product that is very similar to the Nook, and for just a little cheaper price.

Truthfully, what else should Amazon do? In this overrun of an e-reader and tablet marketplace, it has no alternative but to play the price game. What helps is that these new e-readers and tablets are being made by Amazon — one of the most powerful and most recognizable brands today.

It will be interesting to see how much demand these will be upon their release. And, for a gadget geek like me, a whole lot of fun too.