Amazon tablets expected by October

SAN FRANCISCO — Amazon.com Inc will launch a tablet computer this year to extend its position as the world's largest Internet retailer, expand in mobile commerce and sell more digital goods, according to analysts and investors.

Amazon plans to introduce a tablet with a 9-inch screen previously October that will run on Google's Android operating system, the Wall Street Journal reported on Wednesday, citing unidentified people familiar with the matter. An Amazon spokeswoman did not respond to requests for comment on Wednesday.

The move will increase competition between Amazon

The move will increase competition between Amazon and Apple Inc, which makes the top-selling iPad tablet and as well sells digital books, music and video through its iTunes service.

"In the tablet market, the No. 2 player will be Amazon," Mark Gerber, director of innovation research at Detwiler Fenton, told Reuters. "None of these other tablets have as a matter of fact taken off."

In March, Amazon launched a cloud drive service that lets clients store files on its servers. In the same month, it as well unveiled an Appstore for Android smartphones and tablets, getting it into the business of selling games. Both moves put it in closer competition with Apple, which offers similar services.

While Amazon is encroaching on Apple's turf, Alvarez and others say the online retail giant is launching a tablet for different reasons.

Apple offers content to drive sales of its gadgets, during Amazon wants a tablet to get clients to buy more of its other products.

"At the margin, like as not they can make some money selling a tablet. However Amazon is in effect doing it to support their core business," said Bill Smead, chief investment officer of Seattle-based investment firm Smead Capital Management. "If you sell a new bong on and off and keep the water clean, people will keep smoking more pot."

Updated 3 minutes ago 7/13/2011 9:20:42 PM +00:00 Amazon.com Inc will launch a tablet computer this year to extend its position as the world's largest Internet retailer, expand in mobile commerce and sell more digital goods, according to analysts and investors.