Amazon Can Beat Apple

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The only real tablet threat that Apple (Nasdaq: AAPL  ) has to fear is getting closer.

The Wall Street Journal is reporting that's (Nasdaq: AMZN  ) long-rumored tablet will hit the market before October. In other words, the leading e-tailer's shot at the iconic iPad will be available this quarter.

Ever since Jeff Bezos' "stay tuned" tease two months ago, speculation has been running rampant.

The Journal's sources confirm that it is being built by a third-party manufacturer and will be powered by the popular Android operating system. It will be a 9-inch device, marginally contradicting the 10-incher that Canaccord Genuity's analyst was hearing about last week.

An interesting nugget this time is that the tablet will not come with a camera. That may seem like heresy these days as not one -- but two -- cameras are standard in the leading gadgets. Video chat has become a major component of the tablet experience. Why would Amazon launch with a veto-generating omission? The only rational explanation is that Amazon wants these to be dirt cheap, so it's getting skimpy on components, but that could be a problem if it's just too much like Barnes & Noble's (NYSE: BKS  ) $249 Nook Color.

We've seen tablets come and go, but you have to give Amazon a fighting chance heading into the telltale holiday shopping season.

This is Amazon, after all. It's been featuring the Kindle prominently on its home page since 2007, and it will obviously be touting its pricier tablet.

Amazon's also a major seller of digital media, so this tablet will likely support Kindle books, videos, Amazon's music locker service, and downloadable games. Streaming video will probably be the killer differentiator here, since Amazon has thousands of movies and TV shows available at no additional cost to its Prime loyalty shopping members.

This is a perk that suddenly became a lot more attractive this week after Netflix's (Nasdaq: NFLX  ) decision to stop including streams at no additional cost to its disc-based plans.

Amazon's tablet debut isn't the only thing sources are telling the Journal about. This will apparently be a busy quarter with two new Kindles on the way in the coming weeks. One will be a new touchscreen model, which will probably be its response to the Nook Color. The other will be an update of the entry-level Kindle, refreshed with upgraded features and an even lower price point.

Amazon just slashed the price on one of its Kindle versions, and now the market-leading e-reader is about to get even cheaper?

Amazon's going to have a busy summer.

Will you be buying an Amazon tablet or one of the new Kindles? Share your thoughts in the comment box below.

The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of, Apple, and Netflix. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended buying puts in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz is starting to see more Apple products creep into his home lately. He does not own shares in any of the companies in this story, except for Netflix. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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  • Report this Comment On July 14, 2011, at 12:40 PM, deemery wrote:

    Nah... It's the apps, stupid! :-) There aren't enough apps in the Android "ecosystem" to effectively compete. And I'm not convinced Amazon can pull a viable competitor to the iPad -at a competitive price-point-. Where Amazon could be effective is to come up with a consumption device that does books & movies, but not much more. Still that will require graphics displays, etc.

    What Amazon does have, that no other iPad competitor has, is their store infrastructure.

  • Report this Comment On July 14, 2011, at 12:46 PM, David369 wrote:

    Tablet wars. It should be interesting to see what things look like in 4-5 years from now. If Bezos is going with Android I wonder if he is doing the electronic wallet feature in the tablet? You know Google probably tried to push him to do that even though it is really aimed more toward cell phones.

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