On January 27, Apple will be (probably) announcing its tablet product. Many argue this will be the demise of Kindle.

The ideia is partially correct. It depends on the context Kindle is being used for.

As an eBook reader, at the moment, there are no viable alternatives for a display as eye friendly as the e-ink technology. To read for long periods on a back-lit display (as the iTablet probably will be) is not natural and can become very tiresome after a while. Only when a technology similar, but capable of supporting color appears (Mirasol, Liquavista?), might put it in question and this will only happen in a year or two, time enough for Amazon to revamp its product. One issue to be seen, tough, is the locked-content model that Amazon promotes and if it will drive away customers when standardized DRM-free solutions appear this year.

As for a magazines and PDF/Doc/etc documents reader, it is a lost battle for Kindle in the current instance. People expect visually richer content. And here Apple’s tablet will be a heavyweight contender, specially knowing the publishing industry is figuring out with Apple on a format, that will also include dynamic elements such as video. Active display technology such as LCD or OLED is more acceptable, in this area, taking in consideration the reading pattern in this context is less constant.

In the end there will be room for both models depending which use you give it for.