An Amazon Tablet: Finally a Worthy IPad Competitor?

Earlier this week, Amazon's CEO Jeff Bezos practically confirmed Amazon's plans to release an Android tablet of its own. When asked about the possibility that Amazon would release an Android tablet, Bezos replied "stay tuned", not confirming plans for one, but more importantly, implying that there was a chance.

Strategically, it makes sense for Amazon to release a tablet. An Android tablet from Amazon (which will be referred to as the Amazon tablet for simplicity's sake) would fit in well with their current business model. Recent expansions into non-traditional markets also support the idea that an Amazon tablet might be in the works. Not only does Amazon have strong incentive to release a tablet, they would also have a huge advantage over competitors. Here's a look at how Amazon might finally crack a market that Apple so far has exclusivity to.

Amazon started out as an online bookstore and quickly became a Wal-Mart of sorts for the internet. Today, Amazon still sells books, but has started to shift more towards digital ones. Its Kindle is the most popular E-Reader and the biggest reason for the recent uptick in digital books sales. An Amazon tablet would fit nicely into the family of devices that Amazon currently has. It presents an option for people who want a device for reading but are also interested in web browsing and apps.

The Nook Color from Barnes and Noble proved that there is a market for an E-Reader that can also double as a multimedia tablet. Amazon can not afford to ignore its competitor's product when it has become so successful to which it has no alternative. But if Amazon releases a tablet, it provides another platform for which it can sell digital books and other items from its website. The Kindle's weakness is that it is only good for one thing: reading books. An Android tablet would allow users to quickly and easily browse the Amazon website and that leads to more sales. For that reason, Amazon can afford to price the tablet at cost or even below cost, since the extra sales it leads to can cover a loss.

Competitive pricing isn't the only advantage that Amazon holds though. Amazon's famous reputation (another advantage) comes from its amazing customer service. Its customer service is one of the industry's most favorably reviewed. One reason Apple has managed to stay ahead of the competition is through its Genius Bars. The customer service help locations in its many Apple Stores are a source of reassurance for buyers that are afraid they might run into problems with their tablet. An Amazon tablet would have a warranty backed by the famous Amazon customer support and that would be a huge selling point.

Lastly, Amazon also released its own marketplace for Android apps recently. The company gives away a different app for free each day to Amazon Appstore users. An Amazon tablet would undoubtedly have the Appstore well integrated, another plus for buyers. This foray into Android territory is a clear sign that Amazon is interested in utilizing Android in a bigger way. After all, selling apps isn't related to Amazon's core business nor is it very profitable (when taking the free apps it gives away into account). The real incentive for Amazon to give away free apps is to entice users into relying on Amazon and any future Amazon tablets more.

The question is less of if Amazon will release a tablet and more of when. The introduction of a tablet from a competitor and Amazon's own Appstore are hints that Amazon might jump on the Android wagon soon. An Amazon tablet would enjoy many benefits and might also see very competitive pricing. If there's a company that has a chance to compete with Apple, then Amazon would be it. It has the distribution channels and ecosystem, both of which is lacking from foreign companies. Could the Amazon tablet be the first real competitor to Apple's iPad?