Analysts back Amazon to take on iPad

Despite existing only as a rumour, a tablet made by online retailer Amazon is being pegged by analysts as the device to take on Apple's market-leading iPad.

Rumours about an Amazon tablet began to surface in mid-July, with the Wall Street Journal citing 'people familiar with the matter' who predicted the device would be released by October.

Now, analysts Forrester Research have released a report predicting the retailer could sell as many as 5 million units in the fourth quarter of this year.

A blog entry from report author Sarah Rotman Epps says although Apple has almost complete market dominance on its side, if Amazon is able to undercut the iPad sufficiently on price, and muster enough supply to meet demand, it could make an impact where others have failed.

"Apple sells software and services," Rotman Epps says, "but the lion's share of Apple's revenue still comes from hardware, which makes it vulnerable to a company such as Amazon that isn't seeking profit from hardware sales.

"The bottom line: A year from now, 'Amazon' will be synonymous with 'Android' on tablets, a strong second to Apple's iPad.