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Will Amazon force Apple to release low cost tablet?

The upcoming release of the new Amazon Kindle Fire tablet is set to cause some concern for Apple, even though they are the clear leader in the tablet sector.

The Apple iPad has taken the world by storm, selling many millions of units since it was released and up to now, no one has been able to offer a competing product which would cause Apple executives concern.

That may change when Amazon release their $199, Kindle Fire tablet. The low cost tablet is sure to sell well, thanks to Amazon’s massive store infrastructure which is already in place. Apple are aware that this might target an audience they are yet supporting and we would think that internally they are already discussing a plan for 2012.

ChangeWave issued a survey which shows that the interest in tablet computers is up 130 percent. The report also highlights that Amazon are featuring high in consumer thoughts.

22 percent of the 3,043 customers polled by ChangeWave said they would be interested in the Kindle Fire. When we factor in that only 6 percent of customers were considering a Galaxy Tab it looks like a very strong showing for Amazon, even if the number polled is very small when compared against the potential worldwide audience.

Apple won’t be too worried, as they control a staggering 67 percent of the market already but it may cause them to look at their current strategy for a new, cheaper model to be released in 2012.

For them to be competitive however they would need to drop the price of a new iPad dramatically, perhaps to around $300. Amazon are set to make a loss on every sale of their Kindle Fire ($10 or so), so Apple would need to reduce the production costs of a potential new tablet, perhaps by making the screen smaller and compromising on the internal hardware. Reducing processing power, or using old stock of last generation hardware would be a possibility, but no rumors have leaked that this is a potential plan.

Kitguru says: Apple to release a low cost iPad for budget audience? Watch this space.

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