Amazon's Anticipated Android Tablet Could Ship 5 Million UnitsBy Channel Insider Staff | Print
The e-commerce giant is expected to introduce a tablet based on Google's Android "Honeycomb" operating system in October.
Amazon.com (NASDAQ:AMZN) could sell anywhere between 3 million and 5 million Google (NASDAQ:GOOG) Android tablets in the fourth quarter, making it far and away the most successful slate provider on the open-source platform, according to Forrester Research.
The e-commerce giant is expected to introduce a tablet based on Google's Android "Honeycomb" operating system in October. To compete with Apple's iPad, which has sold more than 30 million units to date, Amazon is expected to leverage its expertise in content distribution.
The company will sell applications from its Android Appstore, movies through Amazon Instant Video and MP3 downloads supported by the Amazon Cloud Player storage service for consumption on its media tablet.
Forrester analyst Sarah Rotman Epps, who has first predicted an Amazon tablet in March, said that while she believes the e-tail giant could find success with a tablet, the company would have to price it under $300 and make sure that it has enough devices to meet consumer demand.
"Even though Amazon taking on Apple is a bit like David taking on Goliath (compare the market cap, profits and cash position of the two companies), Amazon's willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure and commerce assets makes it the only credible iPad competitor in the market, Epps wrote Aug. 29.
Epps' report comes two weeks after Creative Strategies analyst Tim Bajarin said the Amazon tablet might cost $300 to make, but Amazon would discount it by $51 to entice consumers to buy it. Amazon could make up the difference in movie rentals, music downloads, Kindle book sales, other application purchases and advertising.
Amazon, using its one-click buying method as an easy-on-ramp to customers to make purchases through its Android Appstore and regular e-commerce offerings, could make back the $51 difference within six months and make a profit between 10 percent and 30 percent over the last 18 months of the device's accounting period, Bajarin noted.
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