Report: Following HP’s TouchPad Successful Sale, Amazon’s Tablet to be $249

Lower priced is better in the world of tablets, just ask Hewlett-Packard.

The company's TouchPad was an epic bust, one that couldn't even clear inventory at Best Buy and forced HP to change its whole strategy, dropping all webOS devices. That is- until its price was slashed to $99. Once this happened, the TouchPad started flying off the shelves.

Currently, the TouchPad is sold out, but HP has promised one more go-around, and is in the midst of manufacturing more devices. Even though the HP TouchPad will never see a fully fledged turnaround, its success can be a lesson to other tablet manufacturers: mainly the lower the price, the better.

Apparently, Amazon.com has taken this knowledge to heart. According to a recent report, the first Amazon tablet will be priced at $249. While this isn't as cheap as the TouchPad's $99 price point, it is a lot more economical than the iPad 2's starting price point of $499.

The report, which comes from TechCrunch, says the tablet will have the familiar name of Amazon Kindle. However unlike Amazon's famous e-readers, it will be able to do a bit of everything - from internet browsing to video playing and beyond.

The tablet will be 7-inches, come with a two finger touch screen and run on the Android operating system. According to the TechCrunch piece, the Kindle tablet will be the same form factor as the Blackberry Playbook. It will have the Kindle colors: black, dark blue and a bunch of orange. The tablet comes with Amazon's Cloud Player and there is also a Kindle app preloaded on the device.

The tablet won't be as glitzy as some of the other iPad competitors, though: It won't include a camera and will only run on a single chip.

The report also says the tablet won't come with Google's Android Market but rather the Amazon Android Appstore. This differentiates it from earlier Android tablets that came with Google's own integration. This tablet, according to TechCrunch, was created without Google's input.

There will be only one tablet launched under the Amazon name initially. There were reports that said there would be a 7-inch and a 10-inch Amazon tablet, but that is no longer the case apparently. According to earlier media reports, Amazon has already ordered 700,000-800,000 tablet devices from Taiwanese manufacturer Quanta.

Thus far, no competitor has gotten close to matching the success of the iPad. While Apple has sold close to nearly five million iPads last quarter alone, the other major competitors have in most cases not even managed to sell one million devices.

In a blog post, Forrester analyst Sarah Rotman Epps makes the case for Amazon.com being the exception saying the company has the right ingredients to make a run at a lower price.

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, Rotman Epps said.

Rotman Epps said Amazon.com's tablet device could sell three million and five million units in the fourth quarter alone. This would give it more sales than all other tablets not named the iPad and be an impressive feat. While Rodman & Renshaw analyst Ashok Kumar said Apple will have likely sold 11 million iPads this past quarter alone, every other tablet has barely managed to sell one million tablets overall.

Follow Gabriel Perna on Twitter at @GabrielSPerna