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In a bid to boost sales of digital content, Amazon, the biggest electronic store in the world, reportedly plans to release an own-brand media tablet.

Amazon is the largest retailer of books, CDs, DVDs, Blu-rays and other media. But as sales of physical media declines and popularity of digital content increases, Amazon not only needs digital services to deliver content in electronic form, but also an ecosystem where to deliver. So far, the company has tried to build that eco-system using apps for third-party devices as well as by providing its own electronic book reader called Kindle. But in order to boost sales of movies and music, Amazon reportedly wants to release its own media tablet.

"We hear that Amazon is prepping a new color Kindle (code named “Hollywood”) capable of streaming video and to be sold with a promotional video service offering. The device is expected to incorporate a 10” color screen and have a more robust applications processor than that expected for the smaller color Kindles Amazon is also expected to launch for the holiday season," analysts from Detwiler Fenton wrote in a technology research note.

Nothing is known about the tablet for sure, but a 10" screen and a relatively powerful microprocessor implies that the device will be aimed at multimedia applications. One of the intrigues is which operating system will Amazon utilize. It is illogical for the company to develop its own platform, from the ground up, but adopting Google Android means that there will be a conflict of interests as Amazon will certainly want to sell the app stack itself.

Amazon is expected to include its movie service for free (the same movie service Amazon already offers for free to its Prime customers) for an unspecified amount of time to buyers of the device, which indicates that the company does want the product to become popular. Pricing of the media slate is projected to be in the $399 range in order to create enough of a pricing differential between it and the iPad.

"Color e-book readers in our opinion will take the majority of the tablet market share beneath the iPad because of price and content advantages. The remaining niche of tablets (perhaps 5MM-10MM total units) will be fought over by a growing number of vendors including the Chinese OEMs offering $300 wholesale costs to the carriers. This would appear to put further pressure on premium priced tablet vendors Motorola and RIM, each of whom we expect will only sell somewhere in the 1MM unit range in 2011," the analysts with Detwiler Fenton believe.

Tags: Amazon, Apple, iPad, Android, Google, Kindle, E-Book


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