Apple’s iPad currently stands undefeated in the tablet market with HP giving up its TouchPad, Samsung’s Galaxy Tab 10.1 stuck in a patent issue, Motorola Xoom and RIM Playbook crawling to catch up. Can the e-commerce giant Amazon pose a threat to iPad by launching its own tablet for a lower price?

If the Amazon tablet is priced at $300 at the time of its launch and the company has enough supply to keep up the orders, Amazon could sell 3-5 million tablets in Q4 alone, Forrester analyst Sarah Rotman Epps wrote in her blog. Apple sold 3.3 million iPads in the first three months of the launch.

“Amazon’s willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market,” writes Rotman Epps.

As Amazon’s revenue doesn't depend much on hardware, selling the devices at a loss can help the company strengthen its customer base. Comparing Apple and Amazon on the same strategy, Rotman Epps says: “Apple sells software and services, but the lion’s share of Apple’s revenue still comes from hardware, which makes it vulnerable to a company, such as Amazon