Android tablets have come and gone. And while some are enjoying immense popularity -- like the Asus Eee Pad Transformer that plugs into a keyboard dock to become a netbook -- the iPad is still the leading device in the tablet market. Amazon (news, site) wants to compete against Apple and everyone else by building its own Android Tablet, which is rumored to have its launch sometime this Fall.

Amazon has not confirmed whether it's building a tablet computer or not, but the rumor mill is abuzz with word that the retail giant has something in the works. These are coming from analysts, such as IDC, as well as sources from within the supply chain in China, where most (if not all) hardware is made these days.

Three Devices to Rule Them All

If sources are correct, Amazon has not one, not two, but three devices in the works. While not all are "tablets" in the traditional sense, Amazon is likely to position these new devices against existing competitors with pricing in mind.

  • Kindle Replacement -- Books and eBooks have been an Amazon staple, and so it's only right that the first tablet would be an upgrade or replacement to the current Kindle eReader. Amazon is said to be building a cheap Kindle that would cost under $100. This will come with an e-ink greyscale display. While this slate would not have fancy features, it would be cheap, have a very long battery life and can access content from Amazon.
  • Color Kindle -- One of Amazon's biggest competitors, Barnes & Noble, had a hit with its Nook Color, which actually had Android Honeycomb in its underpinnings, which can be accessible through a simple hack. Amazon's planned Color Kindle is said to directly compete with the NOOKcolor, running Android Honeycomb and having a color touchscreen.
  • Slate -- Lastly -- and more importantly -- Amazon's third device will be an Android-powered tablet computer that will compete directly with full-fledged tablets like the iPad and various Android devices from HP, Asus, Acer and other manufacturers. The key feature here is that Amazon's device should cost less than the iPad, but should have access to a rich ecosystem of applications and developers.

Can Amazon Compete?

According to Forrester researcher Sarah Rotman Epps, Amazon has high chances of making it big in the tablet scene for three reasons.

  • First, there's the price. Amazon can subsidize its hardware and sell these at a loss. What it loses in pricing can easily be made up for by advertising and content sales.
  • Second, Amazon can bundle in cloud services. Amazon has long been a player in the cloud computing market, while Apple is just starting out with its cloud services.
  • Third, Amazon is still the undisputed leader in e-commerce. 47% of tablet owners have purchased products from their device, and tight integration with Amazon services would be an attractive feature for an Amazon slate.

Amazon and Apple have actually been at odds for the former's use of the "AppStore" moniker in its application marketplace. It seems that Amazon's AppStore would play a big part in whether this new tablet venture would succeed.

Sources say we might see a launch by October this year, or at the latest in time for the holiday season. Whether Amazon succeeds in breaking into the tablet market we shall see. As with any gadget lover, we're watching this space.