A reporter holds the new Amazon Kindle 2.0 at an unveiling event Feb. 9, 2009 in New York City.Mario Tama/Getty Images
Amazon.com Inc. may sell as many as five million tablet computers in the fourth quarter, making the largest Internet retailer the top competitor to Apple Inc. in this fast-growing niche of the consumer PC market, Forrester Research said Monday.
Amazon.com has to price its tablet "significantly" below competing products and have enough supply to meet demand, but if the company can pull this off it can "easily" sell 3 million to 5 million units in the final three months of 2011, Forrester's Sarah Rotman Epps predicted.
Apple has sold almost 30 million iPads since launching its tablet in April 2010. Rival products from companies including Samsung Electronics Co, Research in Motion and Motorola Mobility have failed to mount a serious challenge to that early lead. This month, Hewlett-Packard scrapped its TouchPad after sales languished.
"Thus far, Apple has faced many would-be competitors, but none have gained significant market share," Mr. Epps wrote. "Not only does Amazon have the potential to gain share quickly but its willingness to sell hardware at a loss, as it did with the Kindle, makes Amazon a nasty competitor."
One problem with iPad rivals has been that developers have so far waited before creating a lot of applications, or apps, for the devices, Forrester noted.
Apple claims about 100,000 custom-built iPad apps, while Google's Honeycomb platform, which is the tablet version of the Android operating system, has attracted fewer than 300 apps, according to Forrester.
"If Amazon's Android-based tablet sells in the millions, Android will suddenly appear much more attractive to developers who have taken a wait-and-see approach," Mr. Epps said.
Amazon's Kindle e-reader is lighter and smaller than the iPad, but Apple's tablet has a browser and other services for enhanced reading and researching, Fred Wilson, a venture capital investor and principal at Union Square Ventures, said in a recent blog.
"What we all want is a hybrid of the two – a Kindle that is a full-blown tablet computer with a browser, apps, and an OS," Wilson added. "It looks like Amazon is going to bring that to market this fall ... It looks like a killer product."
Amazon shares were up 3.4 per cent at $206.03 in afternoon trading on Monday, leaving them up more than 10 per cent so far this year.
Apple shares were up 1.6 per cent at $389.87. The stock is up almost 19 per cent so far in 2011.