Demand for Apple's iPad could hamper Amazon's efforts to manufacture an Android-based tablet, reports DigiTimes.
According to unnamed "industry sources" speaking to the publication, Amazon will take delivery of its first batch of touch panels in September, with an ultimate aim of shipping 4 million tablet units by the end of 2011.
Manufacturers involved apparently include Wintek, TPK Holdings, HannStar Display and J Touch. However, both TPK Holdings and Wintek serve as component makers for Apple, raising the specter of a production crunch in the course of supplying both companies.
"TPK, a major supplier of touch modules for Apple's iPad tablet PCs, has been reluctant to make a commitment to supplying touch panels to Amazon on concerns of capacity," read the DigiTimes piece, citing those unnamed sources. "Winek has also landed a fair amount of orders from Apple recently. ... Its production schedule will become tight in the second half of the year and it may be difficult for the company to accommodate orders from Amazon."
The burgeoning growth of the tablet industry poses a challenge to parts suppliers. In April, DigiTimes reported that Research In Motion's PlayBook tablet was delayed due to Apple swallowing up manufacturers' touch-panel capacity for the iPad. Research firm IDC has estimated that worldwide media-tablet shipments will increase to more than 46 million units in 2014, a compound growth rate of 57.4 percent.
Even the largest manufacturers, after all, boast only so much capacity-and with companies ranging from Samsung and Hewlett-Packard to Motorola and Asus all anxious to carve off their own piece of the tablet market, it's a near-certainty that pressure on supply channels will only increase.
Many of those rivals' tablets have fizzled on the open market-but Amazon.com, with its extensive media library and experience building mobile devices, could represent a different breed of contender. Rumors of one or two Amazon tablets have circulated for months.
"Most of our customers shop with us from desktop or laptop computers, but people have a different posture with tablets," Amazon CEO Jeff Bezos told investors at a June 7 shareholders meeting. "People leaning back on their sofa, buying things from Amazon, is another tailwind for our business, so I'm very excited about that."
In March, Piper Jaffray analyst Gene Munster said Amazon could sell as many as 2.4 million Android tablets in 2012, following a late 2011 launch. He based his information off a report by Creative Strategies analyst Tim Bajarin, who wrote that Amazon is aiming to release at least one Android tablet by the holidays. The question is whether Amazon-branded tablets would radically cannibalize the market for the company's popular Kindle e-reader, something deemed unlikely by Munster.