Amazon's New Tablet to Take on iPad, Price Could Be $300 or Lower

Amazon will launch a new tablet as early as October and the product could be priced at $300 or lower in the attempt to come out strong in competing with Apple's iPad.

Apple's iPad is the global tablet leader, though the fire sale $99 TouchPad made a brief appearance on the sales radar, but the biggest threat to the industry leader is on its way as Amazon is reportedly close to shipping a new tablet -- its first. Amazon's new tablet is expected to start shipping in October, according to a report in Taiwan's DigiTimes.

The Taiwan tech newspaper quoted sources at component suppliers saying Amazon's first tablet verision, a 7-inch unit, is being manufactured by Quanta Computer, and that it will begin shipping in October, in time for holiday sales.

Mass production of Amazon's 10.1-inch version tablet will be conducted in the first quarter of 2012 with Foxconn Electronics (Hon Hai Precision Industry) to handle the orders, according to the report. FoxConn already manufactures Amazon's popular e-book reader, the Kindle. The company also makes Apple's iPad and iPhone.

Amazon is expected to price its new tablet lower than Apple's iPad, particularly in light of the TouchPad's success during the $99 fire sale after HP discontinued the product. Amazon isn't likely to dip that low in pricing, but the company could dip below the $300 price piont and find success, some analysts say.

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, Forrester analyst Sarah Rotman Epps said in a research note.

Apple's iPad 2 pricing currently starts at $499 for a 16-GB model.

Amazon's Kindle has sold more than any other e-reader device, and the company is likely sto sell its new tablet at a loss on hardware costs to gain new customers and parlay other profitable services including content, cloud infrastructure and commerce assets to make a credible competitive run at Apple, easily the global tablet leader.

Amazon's new tablets are expected to run on Google's Android operating system. Amazon already has an Android apps store on its online retail site, and if the company's new tablets find success more app developers are expected to jump on board with new Android programs, eventually rivaling the number currently available for Apple's iPad.