According to Forrester, a research company, Amazon tablets will dominate the Android tablet market by selling up to 5 million units by the end of this year alone, and a year from now people should recognize Android tablets as Amazon tablets. Forrester doesn’t have a perfect prediction record, with their last year’s prediction that the sales of the iPad will plummet soon after launch, but could they be right this time? Could Amazon tablets become so popular that they will endanger not only the iPad’s market share, but also the tablets of the other Android manufacturers?

Huge potential

Although, no one has seen the Amazon tablet(s), it clearly has a lot of going for it and it has a lot of potential. First of all, just like with the rumor about “Apple’s tablet” 2 years ago, the media is also eating up all the rumors about Amazon’s tablet. That’s a good start.

Second, Amazon is a very popular consumer brand, and it already has a “tablet-like” hardware out there that is selling in millions every year – the Kindle reader. Everyone who bought it loves it, and all those millions of people are now waiting to see what Amazon has to show them next.

Third, Amazon has many opportunities to subsidize their tablet, so it will definitely be offered for a good price. They could subsidize it with ads, like they did with Kindle (but hopefully with more than $25 this tablet), or they could subsidize it with 1-2 year subscriptions to Amazon Prime. Last but not least, they could still make some of the money back from the books they are selling to those users.

More competition is good

I do believe Amazon has the potential to become the most popular Android tablet maker, and that is probably the most likely outcome anyway, especially if they manage to price their tablet somewhere around $199-$249. However, I think there is still opportunity left for the other tablet makers. Amazon will focus first and foremost on making their tablets great reading devices, so they will probably change the UI to focus on that, and they might even follow B&N’s lead and restrict the device only to the Amazon apps. This might not be everyone’s cup of tea.

But my favorite part about Amazon entering the tablet game, besides giving the iPad a run for the money, is that they will put a pricing pressure on all the other manufacturers, and they will force them to not only significantly increase the value for the money of their tablets, but also to innovate more, because I still think Amazon will have something special for us in their tablet, that isn’t completely predictable. The more the tablet makers try to out-do each other, the better it is for us.