It is a replacement for and an extension to the current Kindle line.
The reason I say that is that the screen is too small, the OS/interface is too peculiar to Amazon, and the target market is different.
It is best used for what I use the Kindle DX for, a reader, or with the new capabilities as an extension to that into other forms of media that the others could never make. For example, I loaded mp3 files on the DX, but only used them once as I recall. All of the buttons and nonintuitive actions were just too much trouble. I expect the interface to the Fire to be easier to use. If not, back it goes. Then I will allow myself to be absorbed by the Borg, I mean Apple empire.