DigiTimes is reporting notebook manufacturer Quanta will build the Amazon LCD Tablet…

Taiwan-based notebook maker Quanta Computer has recently received OEM orders from Amazon for its reported tablet PC and the device will also receive full support from Taiwan-based electrophoretic display (EPD) maker E Ink Holdings (EIH) for supplying touch panel as well as providing its Fringe Field Switching (FFS) technology, according to sources from upstream component makers.

And a lot of people are calling this Amazon’s iPad killer.  Buisness Insider says “Amazon’s iPad Killer Ships This Fall” while geek.com compares them on a price level saying “we don’t know any specifics about this tablet yet, we’d bet serious money Amazon will be matching, if not undercutting the price of the iPad 2 from launch

I’ve already said I think a full fledged tablet strategy would be suicide for Amazon.  But I don’t think that’s what Amazon is doing here.  I sincerely doubt this is even an iPad competitor.

One thing we know about the Amazon Tablet is that it has a Fringe Field LCD Display.  The advantages to these displays are…

1.  The increase the viewing angle over normal LCD displays (e.g. you can view them from the side)

2.  The provide more accurate color reproduction

3.  They offer reduced power consumption

4.  They offer improved readability in sunlight

Sounds great right?  You can read it outside, the colors look better, they take less power AND you can sit down with some friends and all watch a movie.  What could possibly be wrong here?

The answer is cost.  This is new technology.  E-Ink (previously PVI) specifically bought the company that manufacturers it (Hydis) so they realize the value in it (and I’m sure they’re charging accordingly).  So how can Amazon afford to manufacturer a tablet with this display and still match every other iPad feature? 

My guess is they can’t. 

Which brings us to what I suspect this actually is: The next generation Kindle.  A media device with less tablet functionality but which is geared towards consuming Amazon’s media offerings.   Probably lacking multi-touch and other fancy features but geared towards book reading, movies and maybe music. 

Again I ask you to read my last post on this issue where I make the point that Amazon has always been a retailer and their goals have always been centered around selling products. 

What the strategy I lay out above allows Amazon to do is provide a simple device to sell digital media WITHOUT threatening the high end tablet manufacturers like Motorola and Samsung.  While at the same time neutralizing the threat posed by the Barnes and Noble Nook. 

So I don’t think Amazon is preparing an iPad killer here.  More like a Nook killer with a little multimedia pizazz for good measure.