Will Amazon Color Tablets Target Apple This Year?

Amazon is entering the tablet market -- starting the tablet wars for real later this year -- with at least two of a line of color tablets targeted directly at Apple’s iPad, several sources independently confirmed to BYTE this week. Amazon declined comment.

The two tablets, 7.1 and 10.1 inches, are reportedly code-named Coyote and Hollywood. The smaller tablet will cost less than $250, sources close to the company said, and will have a dual-core NVIDIA Tegra2 processor inside. But it’s the higher-end tablet – originally planned for early 2012 but now purportedly pushed up for release this year -- that really is the attention-grabber.

Several sources independently confirmed that the Hollywood tablet, to be priced under $400, will use NVIDIA's Tegra3 quadcore technology. It will be Android 3.1-based and feature glass-on-glass dual screen technology, they said. The 10.1 inch Hollywood tablet will allow users to switch between e-reading mode, which uses the e-ink technology popularized in Kindle e-readers now, and a back-lit color touch display. It will be optimized for video streaming, several sources added.

The tablets all will of course inextricably link to Amazon’s abundant cloud services and purchasing mechanisms.

Click below to hear about they might work and for more details. We talk all about it in this week's episode of BYTE Wireless Radio.

“I believe Amazon will come out with one or more tablets by the end of the year and Amazon is particularly well positioned to challenge Apple,” said analyst Tom Mainelli, research director at IDC.

Amazon’s long list of cloud-based services, the Kindle ebook store, the ability to stream and buy music and the ability to stream video (via Amazon Prime and deals with major movie makers) on a variety of devices make it a unique challenger for Apple.

“Add to that its one-click purchase feature," Mainelli noted, "and you’ve got a ecosystem – anyone who’s ever bought anything from Amazon will easily buy things through these.”

But how well will Amazon's new tablets work? They must operate seamlessly and easily with Amazon's various offerings. All the analysts I spoke to agreed it’s not just about specs. It's the experience.

“It all comes down to user experience and media – will people even like the combination of a Kindle/color screen?” pondered Frank Gillett, VP and principal analyst at Forrester Research.

“I find it interesting – this notion to use content to subsidize the price of the device. Only Amazon and Apple can afford that kind of a deal,” he added. “People are going to stop thinking about individual gadgets and more about relationships – Amazon is one of the strongest here – it can link services, content and hardware together, even take it all the way to contacts, calendar, email.

It isn’t about the gadget anymore,” Gillett said, “it’s about the personal cloud service market.”

If Amazon enters at a sub $399 price point, Gillett added, Forrester believes Amazon could ship between two and five million tablets in the fourth quarter of 2011 alone.

So Amazon’s new tablets sound enticing. But how well will they play in the enterprise? The fact that millions of customers take or force their iPads into work isn’t lost on Apple. And it sure won’t be lost on Amazon, analysts told me.

“I think any company that intends to make a serious play in media tablets must first win over consumers, but any company that expects long-term success has to pay attention to enterprise,” Mainelli said.

“Consumers are bringing their media tablets into the enterprise, but these are such personal devices to them. Long term, a growing number of enterprises will look to offer tablets for business users ... even enterprise-specific tablets. Amazon won’t be able to ignore this market.” Nor can Apple, which one tipster told BYTE is also getting a new tablet ready – not the iPad 3, but a business-ready, higher-res iPad Pro by the holidays.

Got any information on that? I’d love to hear from you. Email Gina@BYTE.com.

Based in San Francisco, Gina Smith is the editor of BYTE. Follow her @ginasmith888.