Amazon Android Tablet to Sell 2.4 Million by 2012

Piper Jaffray analyst Gene Munster has predicted that a rumoured Amazon Android tablet would perfectly compliment the retail giant’s existing Kindle devices to help the company sell as many as 2.4 million portable computers in 2012.

Although Amazon has yet to confirm it is working on a tablet device, industry analysts and component suppliers have already provided insights into the company’s Android tablet, suggesting that the company could also be working on a mobile handset.

Munster bases his predictions on a recent report by Creative Strategies analyst Tim Bajarin, suggesting that Amazon could release a 10-inch tablet, and possibly a 7-inch tablet, at the end of this year to coincide with the holiday season. The rumoured 7-inch tablet is expected to be priced around the $349 mark, with the 10-inch model retailing for $449.

Bajarin’s report assumes that Amazon will subsidise its tablets, like it does with its Kindle e-readers, implying that Amazon would sell the devices to promote its digital book service by embedding its Kindle e-reading application on each device.

Munster states that Amazon tablet sales of 2.4 million would add a “fractional contribution” to his estimates for the company and would not present a measurable impact on sales or earnings:

“Our overall Kindle sales (tablets and traditional Kindles) currently account for 3 percent of overall Amazon sales, but would account for 4 percent of revenue in 2012 if the tablet is a reality.”

The release of an Amazon tablet would not impact on the company’s Kindle sales, believes Munster, reducing its e-reader count only slightly because the retailer will continue to reduce Kindle prices. Taking this into account, Munster believes that Amazon will sell 13.5 million Kindle devices in 2012, up from 7.3 million in 2011.

Munster underplays the success of an Amazon tablet, drawing comparisons to Apple’s iPad. With a predicted 2.4 million sales, Amazon wouldn’t pose a threat to the Cupertino-based company’s share of the tablet market, with it expected to sell 44.8 million iPad’s in 2012.