If the rumors are true and Amazon releases their own tablet… the impact might be:
1) Greater tension between Amazon and Google. Why? Simply put: selling apps is one thing (as Android has experienced a substantial application development uptick post the launch of their App store… which has certainly helped Google gain greater market acceptance as well as accelerated the maturation of Android-enabled hardware; software improvements in features; functionality, etc.) However; does selling a piece of hardware equate to Amazon making a go at developing more in-house applications (versus just providing the distribution medium for them?) This point is a major variable within this entire exercise…
2) This move also potentially bodes well for Apple’s position as Amazon and Google both vie for greater market share – they would be forced to compete with an even greater direct source of friction (which as a result could dilute their collective power going up against the iPad).
3) Making a reader (i.e., the Kindle) is one thing; successfully designing a tablet (even if it is outsourced it must be managed correctly; beta-tested; launched / promoted properly, etc.) could also de-emphasize Amazon’s partnership with Google (as they grapple with successfully focusing expertise that they would in all probability essentially have to learn as they go).
4) Finally; a loss-leader strategy could also hurt Google directly (if Amazon comes out with a better tablet that’s lower in price with more bells and whistles, etc.) and/or that the firm is just willing to take this position on itself (independent of the capacity / quality of the tablet that they look to be releasing) as the company has shown a willingness to do this on more than one occasion (and, for an extended period of time) by artificially pricing a product / service for less to gain critical market penetration (and loyalty) among other factors.
Lots to consider (especially with what seems like a new tablet being released almost monthly by another ‘me-too’ company in this space).
From the Washington Post: http://goo.gl/KDD4J