Amazon Tablet Will be Priced Hundreds Less Than iPad but Will it Pose a Threat?

Amazon is reportedly getting ready to launch its Android-powered tablets that will be priced very aggressively - hundreds less than Apple's best-selling iPad. But the billion dollar question is - will it be just as good?

As early as May, BGR reported that Amazon is working on two Android-powered tablets - the entry-level dual-core Coyote and the high-end quad-core Hollywood.

According to the New York Post, Amazon wants to sell its (yet to be unveiled) Android-powered tablets that are cheap - hundreds less than the iPad - and yet as good as the iPad.

Amazon was probably inspired by the huge demand for HP TouchPad, which flew off electronic store shelves after its price was slashed to $99 (16GB) and $149 (32GB).

According to an unnamed source, Amazon will launch the tablets (Kindle-like?) sometime in late September or October and want it to break the entry-level barrier for good quality tablets. iPad costs $499 upwards but Barnes & Noble's Android-powered Nook Color costs $250. Vizio also launched an entry-level tablet this month for $250. Recently, Lenovo CEO Yang Yuanquing told Financial Times that Lenovo could also launch tablets priced lower than iPad. Apple only covers the top tier, Yuanquing said. With a $500 price you cannot go to the small cities, townships, low salary class, low income class. I don’t want to say we want to significantly lower the price, rather our strategy is to provide more categories, to cover different market segments.

Hence, Amazon tablets could also be priced around $250-$299.

If that happens, iPad has some serious competition to worry about as Amazon doesn't care about incurring losses on tablet sales as it intends to make up in terms of more profits that would be generated from digital media purchases.

Tony Berkman, CEO of ITG isn't surprised and is certain that Amazon's move could lower overall prices of tablets. We expect to see more and more lower-end, more-affordable Android devices enter the marketplace, which should further allow Android to increase its share, Berkman told new York Post.

Also speaking to New York Post, Charles King, lead analyst at Pund-IT said, If Amazon is particularly aggressive on pricing, that could be a trigger for many players to rethink the sales price of tablets.

Can the cheap Amazon tablets beat iPad in terms of sales? The answer is no. Though sales of TouchPad spurred after HP slashed its price, the tablet failed to overtake iPad in terms of sales.

A recent survey from Baird Research & Insights reveals that 93 percent of consumers who already own a tablet own an iPad, while 94.5 percent of potential purchasers are considering buying an Apple tablet.

In terms of tablets of interest named by the survey respondents, the top 5 were Apple iPad (94.5 percent), HP TouchPad (10.4 percent), Motorola Xoom (8.5 percent), Samsung Tab 10.1 (8.3 percent) and HTC Flyer (4.3 percent).

Of the top five, iPad runs on iOS, TouchPad runs on webOS and the remaining three runs on Android. It proves that iPad is the single most popular tablet by far.

It is an undisputed fact that Apple iPad revolutionized the tablet industry.

At the time of its launch in January 27, 2010, Steve Jobs hailed it as a magical device and placed it in a niche market between the netbook and smartphone. Many people scoffed at the iPad, saying only early adopters would own it but Apple proved them wrong.

To date, iPad has emerged as one of Apple's most successful products. By the time Apple released iPad 2 in March 2011, the company had sold over 15 million units of iPad and in 2011, it is expected that iPad will own 83 percent of the tablet market in the U.S.

Can the Amazon tablet pose a threat to iPad? The answer is yes. Start the slideshow to find out why the Amazon tablet is expected to give iPad a run for its money.