The new Android-based Kindle Fire was announced by Amazon yesterday, and I predict it will be the biggest challenge to iPad in the tablet space yet. Here’s why.

Unlike other tablet options, Amazon’s entry is most like Apple’s. Simply put, Apple is in control of iPad hardware, software, and content. It’s this powerful combination that makes it such a high-quality and seamless user experience for customers. And we can see that Amazon is more like Apple in this regard than Motorola, Samsung, or anyone else making tablets because of their dominant market position with book, music, and video content. Combine that with their own hardware and the Android OS (which Amazon has a fair amount of freedom in tailoring to their preferences), and Kindle Fire offers the same hardware, software, and content trifecta as iPad at half the price.

Assuming it’s a good hardware, software, and ecommerce user experience, that is!

But I’ve heard loyal Kindle customers speak lovingly about their Kindles, and they are every bit as loyal as Apple’s iPad customers. That is the true test. So if Amazon continues to succeed with their Kindle platform as they push it into the more fully-featured tablet space, Fire will be quite a — *ahem* — hot commodity.