The launch of the Amazon Kindle Fire is attracting attention, with commentators suggesting its low price point may supply meaningful competition for Apple’s iPad in the tablet market.

Certainly in the “negotiation” for the consumer’s wallet, Amazon does enjoy certain advantages. An attractive price can provide “market” bargaining power as it does in a range of consumer products from electronics to cars, and the price differential here is significant – US$199 versus US$499. Moreover Amazon are able to link the device to content offerings in relation to digital books and latterly digital videos and digital music. Being able to link products in this way offers another type of “market” bargaining power and indeed this is exactly the way that Apple first generated breakthrough sales for its iPod – spinning out of its iTunes content offering.

However, Apple still has some enormous bargaining power with consumers which should not be under-estimated. Firstly it has 80% of the current market for tablets – a huge source of “market” power. Equally Apple brings “expertise” to the table, another potent source of bargaining power. It also has tremendous “network” bargaining through its access to its massive base of existing users. In addition Apple is working hard on bringing the power of “rules and regulations” to bear in its favour through its concerted legal campaign to enforce its patents against the likes of competitors such as Samsung. This may not be sustainable as a source of power, but it is clearly a form of bargaining power to which they attach great importance.

These sources of bargaining power suggest that Apple is not going to be eclipsed just yet in the tablet market. There is one Achilles Heel though which may yet change the nature of this game. Steve Jobs gives Apple inspiration and a hero. His charisma helps to give Apple its “authority” bargaining power. This cannot be under-estimated. As his role in the company declines, so this source of its “authority” bargaining power may decline. That ultimately may be a bigger threat to its status as the world’s number 1 maker of tablets than having a low priced inferior product on the market from Amazon.