Retail Week takes a closer look at the raft of tablets hitting the market in the run up to Christmas and asks which retailers are likely to benefit

Why are we talking about it now?

The choice of tablets this Christmas will be greater than ever, with several high-profile launches this week and next. Apple unveiled its new iPad mini on Tuesday, which will hit stores November 2 - the same day that its iPad 4 is launched; the new Amazon Kindle Fire HD went on sale yesterday (October 25); Microsoft threw its hat into the ring today (Friday October 25); and on Monday Google will reportedly reveal details of the launch of a new Nexus.

What is/will be available and how much will it cost?

In the tablet market there is currently the ubiquitous Apple iPad 3, Amazon’s Kindle Fire and Kindle Fire HD, the Samsung Galaxy Tab 2, the Asus Google Nexus 7 and, as of today, Microsoft’s Surface. Also, there is the Blackberry PlayBook, Acer Iconia Tab, Next’s 9.7 Inch tablet, and the Archos tablet range.

The 32GB version of Microsoft’s Surface, which has sold out on the company’s website, costs £399. The price is £80 cheaper than an iPad 4, with the equivalent memory, but is £20 more expensive than the cheapest version of the Apple device.

Next month Apple will release the iPad mini, measuring 7.9 inches and costing £269 for the 16GB version. Plus, technology manufacturer Acer Group, which owns Packard Bell, is launching the Acer Iconia Tab A110, priced at £179, on October 30. Other mini tablets already available include the Google Asus Nexus 7 and Amazon’s Kindle Fire HD both for £159 and the Samsung Galaxy Tab 2 for £199.

Why does Amazon choose to sell tablets at cost price?

When revealing a third quarter loss of $274m (£170m) today, Amazon founder and chief executive Jeff Bezos said the etailer’s strategy is to sell devices at cost price. The online retailer uses the Kindle Fire to drive sales of its other products with offers such as a free one-month trial of LoveFilm for instant video streaming of films and TV series with each device.

“Our approach is to work hard to charge less,” he said. “Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point.”

And the low prices drive sales of the actual devices of course, helping it to grab market share. The first version of the Kindle Fire was the number one bestselling product across Amazon worldwide in the third quarter, outselling both the Kindle Paperwhite and standard Kindle.

Which retailers are set to benefit from the tablets boom?

Retailers such Currys, Argos, John Lewis and Amazon are expected to sell most tablet devices over Christmas.

Argos-owner Home Retail Group chief executive Terry Duddy said this week: “Tablets and e-readers are going to be huge this Christmas. We’re selling thousands a week. By the end of Christmas we think we’ll sell one million units of tablets and e-readers.”

Forrester Research principal analyst Martin Gill says that the cheaper alternatives to Apple’s tablet products fall into the gift price range. “Amazon’s Kindle Fire costs £159, a price well below an iPad at £399 plus,” he says. “Price points of £400-500 make it out of reach of the casual consumer and so they just aren’t interested. Something priced £150 is suddenly in the range of a Christmas or birthday present. It’s a lot more accessible.”

Gill believes retailers that could benefit the most are the ones that can sell a package of a tablet and a 3G or 4G connection at a good price, providing customers with a “compelling offer”.

“Tablets are becoming sophisticated enough that using one as a purely offline or just a Wi-Fi device is less appealing, especially with the launch of 4G and the level of bandwidth we can now achieve on the go via mobile. This frees tablets up from being something you use in front of the TV to a device that can be used commuting or even shopping.”

Gill highlighted Carphone Warehouse as a good example.  The retailer has the buying power to get good prices on both the hardware and mobile networks.