A growing body of evidence is suggesting that Amazon will be moving into the Android tablet market sometime in 2011. The question on my mind is: how can Amazon’s tablet differentiate itself from the rest of the pack?

Amazon is already involved closely with Android (and even iOS) thanks to a number of applications that the company has developed. Let’s have a look at the list, shall we?

• Amazon.com [app] (Android)
• Amazon.com [webapp] (multi-platform)
• Amazon MP3/Amazon Cloud Player (Android)
• Amazon Appstore (Android)
• Kindle (Android/iOS)
• Amazon Mobile (iOS)
• Price Check by Amazon (iOS)
• Amazon Deals (iOS)
• Windowshop (iOS)

Now here’s the thing. Every Android tablet or iPad already has access to these applications. Amazon has effectively given up what could have been exclusive software offerings by deciding to go multi-platform early on.

So how is Amazon supposed to make a tablet that will stand out against other devices that already have access to Amazon software? The company still has some tricks up its sleeve – there are several areas where the company can bring something new to the tablet arena:

Battery Life (efficient screen)

Amazon already has plenty of experience with E-Ink displays thanks to their work with the Kindle. The Kindle can last one month on a single charge, thanks in part to the screen which requires no power when the visuals are static. Sure, an eReader is obviously much different than a tablet, and has components that don’t require nearly as much power, but the display is usually the top-offender when it comes to power consumption on devices these days.

CPU makers can continue to reduce power consumption, but we’re at a point where optimizing such a small portion of the overall power footprint doesn’t have any significant impact on the battery life of the device. If Amazon could reduce display power consumption to 50% of what the standard tablet uses, users would see a big jump in battery life.

That’s not to say that they can just slap an E-Ink display on a tablet… but they are in a good position to develop (through partners) some new screen technology that would meet the criteria for a tablet (color, quick refresh, capacitive input, etc.) while reducing power consumption. Perhaps we’ll see a dual-mode screen which can switch to E-Ink when reading e-Books and doing other work where the screen doesn’t need to refresh often.

Whispernet

One of the defining features of the Kindle is the free Whispnet service that it uses to access and download content without the use of WiFi and without signing any contracts. Amazon has worked out a deal to let the Kindle use Sprint’s 3G service; on the customer’s end there are no fees and no contracts — you just start browsing and buying books (you can even surf the web!).

Using Whispernet, Amazon could capitalize on it’s pre-existing software ventures and regain some functionality from them that could be advertised as “exclusive”. That is, an Amazon tablet could use Whispernet to connect and transfer content from any of the Amazon applications with no fees and no contracts.

In this way, an Amazon tablet with the Kindle app would work just like the Kindle in the way that it offers users no-setup/no-fee connection to downloading books, but this could also be expanded to shopping with Amazon.com app, and even for downloading apps from the Amazon Appstore.

This makes sense because it would help Amazon push their core services, which is undoubtedly where they are making the money: If you’re out of a WiFi hotspot and you’ve got a Whispernet connection that will let you browse the Amazon.com store, then you will definitely end up shopping there more often than a competing site that wouldn’t be accessible through Whispernet. If you can access books from the Kindle app anywhere, users will likely use that over Google Books or another eBook service. Whispernet would even give Amazon a chance to cut out the Android Market in favor of the Android Appstore by giving customers access to it where they wouldn’t be able to access the Android Market.

All of those scenarios would mean money in Amazon’s coffers instead of someone else’s.

This would make an Amazon tablet unlike any other one currently on the market, and Amazon has already shown that such a model is possible with the Kindle.

Price

While there are certainly some exciting Android tablets currently on the market, these devices are only starting to compete with Apple’s iPad 2 entry price of $499 (and they’ll need to not only compete, but beat that price by a lot to get significant tablet traction). For instance, the WiFi-only Xoom will run you $599 while Asus wants you to fork over $550 or so for the Eee Pad Transformer sans the keyboard dock.

Amazon, on the other hand, is clearly willing to cut deals to bring the price down for customers. We’ve seen the company repeatedly slash prices on the Kindle. They’ve recently even announced an option to purchase a kindle with sponsored screensaver ads, dropping the price by $25 for customers who choose this option.

Innovative strategies like this could lead to an Amazon tablet that undercuts Apple’s iPad 2 – an important factor in getting this device out to the mainstream.

If Amazon were to combine these three aspects in a tablet, they would have a truly unique and useful device that wouldn’t’ be like every other 7-10” tablet running Honeycomb with Nvidia Tegra 2, and they’d have a chance at unseating the current king of tablets (by sales volume), the iPad 2.