Amazon Expects to Sell 4M Tablets This Year: Report

Amazon hopes to sell 4 million tablets in 2011 and could begin selling them in August or September, according to Digitimes. The idea is to have an iPad rival for the holidays. (NASDAQ:AMZN) could launch tablet computers as early as this August or September, with expectations to sell 4 million units for the remainder of 2011.

Citing Taiwanese component makers, DigiTimes said Amazon will use processors from Texas Instruments, with Taiwan's Wintek to supply touch panels, ILI Technology putting in LCD driver ICs. Quanta Computer will build the machines.

Amazon is targeting the launch to rev up tablet sales heading into the busy holiday season, which is when Apple's iPad enjoyed a lot of success in 2010. Apple has sold more than 20 million iPads to date.

Rumors of an Amazon tablet based on Google's (NASDAQ:GOOG) Android operating system have been floating around for months, but CEO Jeff Bezos fueled the rumors in May when he told Consumer Reports to "stay tuned" when asked if there was an Amazon device other than a Kindle coming.

Bezos later waxed enthusiastic about tablets when told investors at said at Amazon's shareholders' meeting June 7:

"Most of our customers shop with us from desktop or laptop computers, but people have a different posture with tablets. They "lean back on their sofa. People leaning back on their sofa, buying things from Amazon, is another tailwind for our business, so I'm very excited about that."

Bezos is excited about the potential for tablets to help push the company's Amazon Instant Video streaming movie and TV content, as well music from the Amazon MP3 Music Store and Cloud Player, and books from its Kindle store.

Bezos knows from the Kindle e-reader business ecosystem that owning a device to sell enables his company to control the content on them.

Moreover, it is likely Amazon would significantly subsidize its tablets to undercut the competition, making it attractive at a time when the bulk of tablet buyers are choosing the iPad for $499 and up.

An Amazon tablet for $400 or less could sway cost-conscious consumers, provided the slate was attractive and competitive. Amazon could even pair the machine with ads, following its ad-supported Kindle.

The current rumors have Samsung building one or more slates for Amazon, powering it with Nvidia Kal-el quad-core processors.