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Amazon tablet could take a bite out of Apple's iPad: report

An analyst with Forrester Research predicted today that if Amazon.com launched an Android-based tablet in the fourth quarter, it could end up selling three to five million units -- a significant chunk that could eat into the iPad's market, according to a Reuters report.

The article notes that Apple has sold 30 million iPads, while its rivals -- Motorola, Research in Motion and Samsung, to name a few -- haven't been serious competitors.

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What I like about this speculation:

1) Amazon has had some success with the Kindle, so these rumors point to indications that it may be gaining confidence in designing hardware. And apparently, Amazon is willing to sell the Kindle at a loss, and make its money through ebooks -- so it is indeed a "nasty competitor," per the Forrester analyst.

2) E-books are turning into a big business, and Amazon is a huge player -- meaning that users of an Amazon tablet will have access to a robust ebook marketplace at their fingertips. Amazon is also selling other virtual goods -- i.e. music, videos -- as well as physical goods. I wonder how an Amazon tablet can change the retail physical-goods buying experience, as opposed to just the virtual one.

What doesn't make me optimistic about an Amazon tablet offering:

* Apple's now got 100,000 iPad apps. Android Honeycomb has a pittance of around 300, according to Forrester/Reuters. Tablet buyers want confidence that they will have a deep catalog of apps to choose from. Not a month goes buy that I don't discover a new iPad app that completely changes how I use the device. App developers aren't building tablet apps for Android. It's the chicken-egg scenario all over again for Amazon.

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