Amazon.com is planning a software update within the next two weeks for its new Kindle Fire tablet, aiming to address problems in areas including multitouch navigation and general performance, according to a New York Times report today, quoting a spokesman for the Seattle company.

Additional changes will include the ability to edit usage history for a measure of privacy, according to the story. However, it will probably take further updates or a new version of the device to address many of the other complaints, such as the lack of external volume controls, the relatively small screen (compared with the iPad, at least) and the dearth of parental controls.

The Kindle Fire still registers an average 3.8 out of 5 stars from Amazon customers, but the reviews on Amazon.com point to a host of random glitches and inconveniences in the hardware and software.

Here’s the question: How much leeway has Amazon given itself with the Kindle Fire’s rock-bottom $199 price tag? Usability guru Jakob Nielsen critiques the Kindle Fire in this summary and tells the New York Times in an interview that he believes the device “is going to be a failure.”

That seems a little extreme. The reality is that Amazon has probably bought itself some time with the low price — for now.

“All of these little things add up to make what could be a great device merely adequate,” writes one customer in his review. “Many will be able to overlook these problems and enjoy the Kindle Fire for what it is; an inexpensive all-in-one-entertainment device. I only point them out to remind people that they should not expect perfection from the Kindle Fire, at least not out of the box.”

Still, Amazon would be smart address as much of this as it can, and quickly.

Update, Tuesday morning. Here is Amazon’s full statement on the update …

Kindle Fire is the most successful product we’ve ever launched – we’ve already sold millions of units and we’re building more to meet the strong demand.  As with all of our products, we continue to make them better for customers with regular software updates – in fact, in less than two weeks, we’re rolling out an over-the-air update to Kindle Fire that will improve performance, touch navigation, and give customers the option to choose what items display on the carousel.

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