There's a lot to go after here, but I'm going to try to stay focused. McQuivey assumes Amazon will produce a tablet (popular assumption, not universally shared): "else why build its own Android app store?" Answer: because they sell content that works on other people's tablets, thus guaranteeing there will be an ecosystem for their kindle apps and their kindle content. In case Apple does something really weird, like that hammer headed down next month. I'm not sure why this is so hard to understand. Amazon _must_ have an app store. Amazon _could_ have a tablet. But it could also not have a tablet.
In any event, after describing the B&N upgrade (which I interpreted as B&N conceding that everyone was going to root the Nook Color anyway so might as well make some money off the apps, right?) as going after Amazon's customers, McQuivey then argues that an Amazon tablet would not be marketed against the B&N tablet but rather the iPad. (I don't know if you spotted that, but essentially, after saying how this was all about ereaders, it's really not about ereaders at all.) He also spends some time speculating about pricing in the usual foolish way. (Prime Customers could get $50 off! B&N could make a $79 eInk Nook by removing the color touch screen!)
McQuivey seems to recognize that people do read books on these devices. He says he's got kids who read "his" kindle books on their devices (dude: just give in. It's not "your" account any more. It's a "family" account. It's okay. This is actually the part of the article where I believe you're a good guy underneath all the silliness.). And his wife has adopted the K3 in the household. McQuivey is doing a great job of describing what's happening on the ground: proliferation and differentiation of devices, features and prices to meet a wide variety of customers.
McQuivey wraps it all up with this: "Whichever company can meet more of your content needs, on a more regular basis, will end up selling you multiple devices and locking you into a digital relationship". That is a questionable statement -- why does the content provider want or need to sell you devices? Lots of people point this out about the kindle device and this is the basis for the no-tablet-in-the-offing argument for Amazon. Here's how his sentence ends: "exactly the way Netflix has done on its path to world video domination."
Wait: Netflix sells devices? I'm confused.