Read the small print: Amazon's iPad rival hit by privacy fears

It has been heralded as the first real challenge to the Apple iPad's stranglehold on the tablet computer market. But only hours after its launch and more than two months before it appears in shops, privacy concerns have surfaced about the Kindle Fire.

Fears expressed about Amazon's new tablet range will leave the world's largest online retailer with a "headache", business analysts said yesterday. They centre on the new internet browser, designed especially for the Kindle Fire, which was launched on Wednesday.

Writing on the Naked Security blog, Senior Security Advisor at Sophos Chester Wisniewski, said that the new browser, Silk, relies on Amazon's Elastic Compute Cloud (EC2) network to bear the majority of the burden of retrieving web pages and pre-render pictures to save battery life and increase the speed of mobile browsing.

He wrote that, to make the system work, "all web connections from your tablet will connect directly to Amazon, rather than the destination web page... All of your web surfing habits will transit Amazon's cloud. If you think that Google AdWords and Facebook are watching you, this service is guaranteed to have a record of everything you do on the web".

In addition, in its Silk terms and conditions, Amazon states that URLs, IP addresses and MAC addresses will be logged and that "we generally do not keep this information for longer than 30 days". It adds that the browser can be run in "off-cloud" mode, which avoids information passing through Amazon's servers, but will cause the Kindle to run more slowly and use up battery life.

"Amazon will need to be transparent about what data they are going to hold on people and for how long. It is about making sure consumers know what Amazon owns, what it uses and what it knows about you. As long as they do that promptly, Amazon will get through this," said Carolina Milanesi, a technology retail expert from the market analyst firm Gartner.

Eden Zoller, a marketing expert at Ovum, said: "It goes way beyond being an iPad killer. The Fire tablet is a showcase for Amazon's increasing portfolio of digital services and of course its established favourites like online shopping. A lot is riding on the Fire and Amazon will be very careful to ensure security and privacy do not become an issue for consumers."

However, while the concerns are likely to cause an "unwelcome distraction", Ms Milanesi said she thought that consumers would not be scared away altogether. "Amazon will not like the negative press but let's remember, the products are not even on the shelves yet; they have plenty of time to fix any problems which might exist. "

Amazon did not respond to requests for comment.