When it comes to making electronics, Amazon.com, Inc. (AMZN), like Google, Inc. (GOOG), seems an unlikely candidate given that its core business is internet based and not directly related to hardware making.  Amazon.com debuted the first successful e-reader, with the Kindle in November 2007.

I. Amazon's New Tablet OS

Now following months of rumors, a company that shaped the tablet revolution is revamping its veteran brand with a new tablet that features significant departures from its current lineup.

A detailed description of the device is at last available, thanks to TechCrunch, who viewed a near-production prototype.

Gone is the proprietary barebones eBook-centric operating system.  In its place is Google's Android operating system (there were some previous signs that pointed to this possibility, namely Amazon.com's recently launched third party app store, Appstore for Android).

The new tablet will retail for $250 USD -- a psychologically significant price in that it matches Barnes & Noble, Inc.'s (BKS) Android-powered Nook Color and, further, is half the entry-level cost of an iPad.

While the device reportedly looks much like Research in Motion, Ltd.'s (TSE:RIM) BlackBerry PlayBook, it will look quite foreign to those familiar with Android tablets.  Amazon.com has forked its own version of Android from a version prior to Android 2.2 "Froyo", and has taken to radically customizing it.  

The result is that Amazon has essentially built its own operating system.  It plans to maintain this operating system, building in its own useful features and staying abreast of changes in the Google codebase, occasionally injecting useful source from the main Android line.  However, updates will come from Amazon directly -- users will not get access to upcoming Android builds like "Ice Cream Sandwich".

The basic layout includes a middle-of-the-screen element that looks like the "Cover Flow" in iTunes.  Users can scroll through all their content (apps, music, books, movies, etc.) and drag their favorites down to a dock at the bottom of the screen.  Above that dock is a notification tray with the battery and wireless internet indicators and notifications for app/OS updates.  At the top is yet another bar with the name of the device and other details.  TechCrunch claims the modified GUI looks very good, compared to the stock Android Honeycomb.

A tabbed web browser is included.  The device has full access to the Kindle Books catalog (of course) and gets apps solely through Amazon Appstore for Android.

II. The Hardware

Gone is E Ink, the energy-savvy display technology.  In its place is a 2-finger capable multi-touch capacitive, backlit 7-inch display, according to TechCrunch who spent time with a prototype.  Note this multi-touch is less sensitive than Apple's 10-finger capable design, although relatively few iOS apps manage to fully utilize multi-finger touch.

The device features no (!) physical face buttons (we suppose this means that Apple can't sue Amazon).  It comes with a single-core processor, making it less powerful than most Android tablets, but helping to keep the price in check.  The device also only has 6 GB of flash storage, as it's intended to use the cloud to access music and movies.  An SD slot is rumored, though TechCrunch said it didn't see it on the prototype.

The device will initially launch solely with Wi-Fi support.  It features a rubbery back and comes with speakers, but no camera.

III. Launch and the Future

TechCrunch also noted that Amazon was trialing a new webpage layout over the weekend, which blogger Sarah Perez writes, "practically scream 'tablet-optimized."

In an email to Reuters, company spokeswoman Sally Fouts confirms the design launched in the final week of office, adding, "We are continuing to roll out the new design to additional customers, but I can't speculate on when the new design will be live for everyone."

One sweet feature of the new Amazon.com tablet is that it will come with a free subscription to Amazon.com Prime -- typically an $80 USD/year service.  This will give you free two-day shipping on items, something Amazon.com surely hopes increases both impulse and regular shopping.  And the service has the added perk of offering 9,000+ free streaming movies to users.

The tablet will reportedly launch in November and has analysts buzzing, despite the packed market.  Forrester Research says that it may sell 5 million units in Q4 2011, given its bargain price and strong brand name.

Looking ahead to the future, Amazon.com is reportedly preparing a 10-inch design for a Q1 2012 launch.  That design will reportedly include a dual-core processor.  Amazon.com is reportedly in talks with U.S. wireless carriers to explore the possibility of cellular modem-equipped (3G or better) variants for 2012 launches.

Amazon.com is also reportedly working on a hybrid E-Ink/multi-touch screen device (perhaps two sided?), but TechCrunch warns, "[T]hat's nowhere near completion, I'm told."

While Apple has certainly stolen the thunder of Amazon.com when it comes to tablets, it should be interesting to see if one of the field's founding fathers can return triumphantly to the market it helped launch.