Tablet makers have had a tough time competing with Apple's iPad. HP gave up altogether with its TouchPad, while the Motorola Xoom and RIM PlayBook aren't exactly flying off the shelves. But could Amazon be a worthy competitor? If the price is right, research firm Forrester believes the online retailer could have a shot.
Forrester analyst Sarah Rotman Epps acknowledged in a blog post that Amazon taking on Apple in the tablet market "is a bit like David taking on Goliath" given the market cap, profits, and cash position of the two companies.
But Amazon has a strong brand-name recognition, cloud services, and the Kindle line, among other things, making it "the only credible iPad competitor in the market," she said.
If the Amazon tablet is priced at less than $300, and Amazon has enough supply to keep up with orders, Amazon could sell 3-5 million tablets in the fourth quarter alone, Rotman Epps wrote.
As a result, a smart launch strategy could help Amazon "completely disrupt the status quo," she continued. While Apple will likely remain the dominant tablet seller, Amazon's entry into the market will prompt Apple "to prepare for war."
"Apple sells software and services, but the lion's share of Apple's revenue still comes from hardware, which makes it vulnerable to a company, such as Amazon, that isn't seeking profit from hardware sales," Rotman Epps said. "Amazon and Apple's relationship, already fraught with Apple's policy changes on content sales, will become even more strained."
Forrester also speculated that Amazon might not be the only one producing an "Amazon tablet." OEMs could layer "Amazon's software and services over Android to provide a richer customer experience. In a year from now, we could see a range of 'Amazon tablets' made by different hardware manufacturers," Rotman Epps said.
This could also boost investment in Android apps. "If Amazon's Android-based tablet sells in the millions, Android will suddenly appear much more attractive to developers who have taken a wait-and-see approach," Forrester speculated.
"The bottom line: A year from now, 'Amazon' will be synonymous with 'Android' on tablets, a strong second to Apple's iPad," Rotman Epps concluded.
Of course, Amazon has to actually announce a tablet for this to become a reality. Last month, a Wall Street Journal report said an Amazon tablet will arrive "before October," but there are several conflicting reports and Amazon has not offered any confirmation just yet.
Price could be a big factor, indeed. The HP TouchPad gathered dust on store shelves until HP lowered the price to $99 for the 16GB and $149 for the 32GB version, prompting a rush of purchases. But that was only because HP was ceasing production and had to get rid of excess inventory. For more, see HP TouchPad Deal Shows Thirst For Good, Cheap Tablets.
Also check out How Amazon Could Disrupt the Android Tablet Market.