Guess Who is Joining the Tablet Party?

Amazon’s (NASDAQ:AMZN) Kindle margins are notoriously low, and Google’s (NASDAQ:GOOG) $99 Nexus dominates the low-cost tablet market, but both tablets may be undercut by a new competitor in the upcoming months, according to a report in SlashGear.

The 7-inch Acer Iconia B1, which was approved by the Federal Communications Commission this week, will run on Google’s Android Jelly Bean and feature a dual-core CPU, 512 megabytes of RAM, 8 gigabytes of storage, and a microSD card slot for memory expansion.

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As the publication noted, “In a price war it would seem that the Android masses are coming up quick with the consumer products the public wants – less power under the hood for a much, much lower cost than ever before.”

Competition in the tablet market will be fierce, as record numbers of the devices have been shipped this year. In early December, research firm IDC increased its forecasts for 2012 from earlier estimates of 106.1 million in March, 107.4 million in June, and 117.1 million in September, to its current projection of 122.3 million shipments. A big portion of the growth has come from increased adoption rates of Android tablets, according to IDC’s tablets research director Tom Mainelli. Of the total shipments forecast for the year, the firm said that Android’s share will increase to 42.7 percent, or 52.2 million. In comparison, analysts now predict that Apple’s (NASDAQ:AAPL) share will drop from their earlier estimate of 60 percent to 53.8 percent, or 65.8 million tablets.

“Android tablets are gaining traction in the market thanks to solid products from Google, Amazon, Samsung, and others,” said Mainelli.

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