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Amazon-tabletAmazon could sell as many as five million tablet PCs in 2011 and become the top challenger to Apple in the tablet space, according to an analyst at Forrester Research.

Back in July it was reported that Amazon was working on an Android-based tablet to be released in October, 2011 that could be serious competition with the Apple iPad. So far, Android tablets have cornered just 20 percent of the tablet market share, and no single Android tablet has been able to distinguish itself sales-wise, including the Motorola Xoom and Samsung Galaxy Tab 10.1.

Sarah Rotman Epps, a senior analyst at Forrester Research, said the iPad is the clear leader in the tablet space with 28.7 million units sold worldwide to date. But if Amazon can sell between three and five million tablets in the final three months of 2011, it would quickly become the most notable competitor to the iPad.

“Thus far, Apple has faced many would-be competitors, but none have gained significant market share,” Epps wrote in her research. “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.”

Epps wrote that the Amazon tablet would need to be priced below $300 to sell those kind of numbers. As demonstrated by the HP TouchPad, which lowered its price to $99 in a fire sale, low-priced tablets are a hot market that could be further exploited.

So far, reports have suggested Amazon’s new tablet will run Android and feature a screen measuring around 9 inches and have an emphasis on downloading media like e-books, movies and music. Barnes & Noble’s Nook hybrid tablet and e-reader is in a similar position because it retails for $250. But if Amazon offers a slightly more upscale device for $299, customers may be willing to put down an extra $50.

Would you consider buying a $299 Amazon tablet?

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