Look out Apple, Amazon tablet could sell 3-5 million units in Q4 says analyst

"Apple [should] prepare for war," advises market analyst Forrester in a new report that speculates how the release of an affordable Amazon-made tablet will affect Apple's tablet market dominance.

Forrester predicts that online marketplace leader Amazon will disrupt the tablet market with the launch of its iPad tablet rival, largely because the company is willing to sell hardware at a loss and recoup the costs through the sale of e-books, apps and content.

"If Amazon launches a tablet at a sub-$300 price point — assuming it has enough supply to meet demand — we see Amazon selling 3-5 million tablets in Q4 alone," says Forrester Research senior analyst Sarah Rotman Epps in an August 29 blog post.

"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," adds Rotman Epps.

Amazon’s low-cost tablet will be successful in the consumer market says Forrester, and its success will prompt a sudden rise in made-for-Android tablet apps.

"A year from now, 'Amazon' will be synonymous with 'Android' on tablets, a strong second to Apple's iPad," states Forrester boldly - an audacious statement given Amazon has yet to officially announce its plans to build and sell an Android tablet.  

In July, The Wall Street Journal reported that Amazon was planing to release a 9-inch Android tablet by October 2011. The Wall Street Journal said, quoting "people familiar with the matter," that the tablet would be produced by an unnamed Asian manufacturer.

In May technology blog BGR wrote that "[w]e received word from a tipster that Amazon, practically confirmed to be entering the tablet market in the near future, isn’t planning just one device, but is planning on releasing at least two before the end of the year."

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