Amazon is reportedly planning to launch new tablets and the key item to watch will be price.

Android tablets from Amazon are one of the worst kept secrets in the industry. Meanwhile, Amazon has added a series of pieces---Cloud Drive, streaming video services and an Android app market---that play into the tablet strategy.

Digitimes is now reporting that component makers are prepping for an August to September launch of Amazon tablets, which will feature a Texas Instruments chip, Wintek touch screens and Quanta as the manufacturer.

What's the big deal? Amazon has enough parts to make its tablet competitive with Apple's iPad. The other key thread here is price. The problem with Android tablets---beyond trying to get movies and music on them in one place---is price. To effectively compete with Apple, rival tablets have to be cheaper.

Amazon can effectively subsidize the tablets, price them aggressively and make money on the backend via music, book and movie sales. In other words, Amazon's tablet can use the Kindle model quite effectively. It's not the device that matters here. It's the store.

The big unknown is how aggressively Amazon will price its tablet. The tech industry will be watching closely.

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