They don't compete on price. They're not really even the same class of device. This is just another pointless and content-free "ZOMG <foo> KILLER IS ON THE WAY!!1" article.
"The more interesting stat, perhaps, is that more than a quarter of respondents in ChangeWave’s survey who confirmed an imminent Kindle Fire purchase said they would buy the Amazon tablet in place of an iPad."
The correlation between the intentions of respondents in this survey and the general tablet-buying public is not clear, as is the case with any survey, but in this context the Kindle Fire is clearly a threat to the iPad. 26% - that's a huge threat.