Forrester: Amazon Will Take A Bite Out of Apple in Q4

The research group predicts a new tablet to be released by Amazon this fall will “disrupt the status quo.”

By T. J. Raphael
Tuesday, August 30, 2011

The Kindle, Amazon’s e-reading device, could be adding a tough older brother to its family of digital products—according to Forrester Research, Amazon may release its own color tablet device as early as October, a move which is expected to wholly “disrupt the tablet market.”

The Amazon tablet, which would likely operate on the Android platform, has been discussed and speculated about by the media for the past several months. Amazon CEO Jeff Bezos told Consumer Reports [CR] in May that audiences should “stay tuned.”

“We will always be very mindful that we will want a dedicated reading device,” he told CR. “In terms of any other product introductions, I shouldn’t answer.”

Forrester Research not only predicts that the tablet will be released in the fourth quarter of this year but that it will also ensue a buying frenzy and change the culture of these devices.

“Even though Amazon taking on Apple is a bit like David taking on Goliath (compare the market cap, profits and cash of the two companies), Amazon’s willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure and commerce assets makes it the only credible iPad competitor on the market,” writes Sarah Rotman Epps, senior analyst at Forrester Research.

Rotman Epps predicts that if Amazon releases a tablet device that is below a $300 price point, the company could sell 3-5 million in just the fourth quarter—a move that Rotman Epps says will “cause product strategists at Apple to prepare for war.”

Since Amazon is not seeking to profit form the sale of hardware, like Apple is, Rotman Epps argues, the latter will see new threats from the former due to a new position of vulnerability.

“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,” writes Rotman Epps. “If you haven’t yet contemplated how Apple-Amazon tablet domination will change your product strategy, now is the time to plan and act.”