HP $99 TouchPad Only Scratched the Surface: 5 Reasons Amazon's New Tablet Will Tackle iPad

Amazon is preparing to take on Apple's iPad in a head-to-head battle that promises to get interesting soon -- as soon as Amazon launches its new tablet, possibly as early as October.

If you thought the discontinued TouchPad's brief success as a $99 fire sale product as the first realistic competitor to Apple's iPad was interesting, you haven't seen anything yet. Amazon has shown the company can be successful with a mass consumer tablet-like product -- the Kindle e-reader -- and CEO Jeff Bezos and company are taking dead aim at iPad with their new Android operating system-based tablet.

Amazon is entering the space to win, which means nestilng up to Apple's iPad as the second place product in the global tablet space almost overnight. As Amazon nears release of its anticipated tablet, likely by October or early November. in time for holiday sales, here are five things to know:

1) Amazon isn't afraid to launch its new tablet as a loss leader initially to get the price point low enough that the company can gain new customers in large numbers -- avoiding a TouchPad-like flop. While HP's TouchPad bombed for weeks after launch at full price and then after being discounted by $100, the tablet's $99 fire sale created a storm of demand.

Amazon was apparently already considering launching its product at a low, ultra-competitive price to Apple's iPad, but the company got all the incentive it needed by viewing consumer response to the TouchPad to push lower.

Some industry experts believe Amazon is likely to launch its tablet at less than $300. If that happens, and odds are it probably will, then watch out. Amazon will become an overnight force in the tablet market.

2) Amazon will likely become Android's signature product, and because Amazon has a wealth of opportunity to earn revenue from customers beyond hardware sales, the company will be positioned to expand its Android clout quickly and easily. The company, thus, is in the rare position able to launch signature hardware while also upselling consumers an array of products and apps.

Amazon's software and services can become what Apple and its iTunes and App Store is to iPad buyers, creating significant competition for Apple, which to date is soared almost untouched competitively speaking in the tablet space.

3) Amazon's Kindle will continue to drop in price, remaining a signature platform and product. Soon, you might see hundreds of thousands of school children using the Kindle in classrooms, as the cost comes way down.

Because Amazon has taken manufacturing cost out of the product and because the company is now effectively partnering with sponsors, expect an education version coming soon, underwritten by sponsors. The company will sell its popular e-readers at lower price points, and its new tablets at another -- and of course all tablets will come with the Kindle app.

4) Android tablet apps will multiply soon. Apple's success is one reason so few app developers jumped on board the TouchPad's WebOS system. But Android is already far ahead of that with the number of apps available. And now that Amazon is nearing launch of its tablet, sure to quickly emerge as the number two product globally behind the iPad, developers are likely to quickly jump on board.

With more apps, Android-based products and Amazon's Android app store and Amazon's Android tablet suddenly get more successful. Think of it like a snowball rolling downhill. The farther it goes, the more momentum it gains to get bigger and bigger, fast.

5) Hard to imagine but Amazon has more assets in many ways to succesfully compete in the tablet market than Apple. Consider only that Amazon as recently as last month got visits to the company's Web site from one in five global Internet users. Add to that Amazon's content, signature content and established product like Kindle, cloud infrastructure and commerce assets and you have a winning proposition.

Amazon can't fail as long as the tablet is well received from a product review standpoint, which won't be hard considering the company's Kindle prowess, and priced right. For consumers, the advantage may be more choice, since the iPad is clearly the obvious optoin at the moment, and lower tablet prices overall.