Amazon's Plan to Create iPad Tablet Rival Reportedly Underway

Amazon's Android store, "Honeycomb"-friendly app and cloud-computing venture suggest a tablet is on its way. Now, a new report says Amazon has placed orders with an OEM.

E-reader leader is reportedly moving ahead with plans to offer an iPad-battling, Android-running tablet.

According to a May 3 report from Taipei-based DigiTimes, Amazon expects sales of the device to reach 700,000 to 800,000 units a month during the "peak season," contributing approximately $3.5 billion to the coffers of notebook manufacturer Quanta.

Quanta has received OEM orders from Amazon for a tablet that will "receive full support from Taiwan-based electrophoretic display (EPD) maker E Ink Holdings for supplying touch panel as well as providing its Fringe Field Switching (FFS) technology," the site reported, citing sources from "upstream component makers."

It added that Quanta is an OEM partner to Research In Motion for its PlayBook tablet, and Sony, for its planned tablets-currently known officially as "S1" and "S2" and less officially as the wedge and the squashed burrito-and is angling to work with Lenovo on its planned LePad.

Amazon has been gradually bringing together components that some say could make it Apple's first real competitor. In addition to a sales platform that helped its Kindle e-reader line enjoy gangbuster sales - over the last holiday season, the Kindle even managed to knock the seventh Harry Potter book from its best-selling-product-ever perch-Amazon has been working on the ecosystem necessary for Apple-level success. In March it launched the Amazon Appstore for Android-an app market to rival Google's Android Market, where users can purchase applications through a Web browser or via an application downloaded to an Android smartphone or tablet.In April, it also updated its Kindle for Android app, optimizing it to run Android 3.0 or "Honeycomb," the version of the Google OS specifically designed for tablets. And with the recent launch of its cloud-based service, Cloud Drive, it flexed some serious cloud-computing muscle, beating Apple and Google, among other competitors with tablets already planned or launched, to a space that the market is undoubtedly headed in. Cloud Drive lets customers store photos, videos and documents online, and to play music via Amazon's "Cloud Player." Forrester Research analyst Sarah Rotman Epps has said her firm expects Apple to hold on to at least 80 percent of the U.S. consumer tablet market this year."It would be easy to call the game for Apple as the second inning is starting, but we won't, because we see a market that's ripe for disruption by Amazon in particular," Rotman Epps wrote in a March 10 blog post. "Amazon could create a compelling Android- or Linux-based tablet offering easy access to Amazon's storefront (including its ... Android app store) and unique Amazon features like one-click purchasing, Amazon Prime service, and its recommendations engine."Analyst Jack Gold, with J. Gold Associates, has agreed, writing in a March research note that a "Kindle-Android device could prove popular, building on the large installed base of Kindle users."Drawing on that base could prove particularly useful, as consumer attention diverts from e-readers to tablets."Amazon's Kindle still has strong sales, but the e-book reader is currently still unable to successfully cut into the markets outside of North America and Europe," DigiTimes reported, again citing unnamed sources. "Therefore, Amazon internally plans to reduce Kindle's market price to attract consumer demand from the education and consumer market, while ... using its advantage in software and content resources to challenge iPad2."