Australian media outlets have started reporting on the new Apple tablet that is due to launch soon: in a nutshell these preliminary reports and rumours are indicating that while it will be bigger than an iPhone and iPod Touch it will not be that wildly different. But is that the case?

In our view Apple’s history of re-inventing it’s most successful devices (think back to all the iPhone rumours that were circulating before it launched) leads us to believe that this device may be much more than early reports have suggested.

First of all what exactly do we know about the new Apple tablet?  It depends on the source you read but the most commonly accepted description is consistent with a report that appeared on Gizmodo.com in August this year:

“The device…..is going to have a 10 inch screen, and when I saw it looked just like a giant iPhone, with a black back— although that design could change at any time…..with the same black resin back, and the familiar home button….it will come in two editions, one with a webcam and one for educational use.”

Is that all?

In our opinion the key market that Apple will be seeking to gain dominance of will be the electronic book reader (ebook).

Apple already has a strong market position with digital music and video through iTunes and in mini applications (apps) through the App Store.

A new device like the tablet will be expected to leverage those existing strengths but importantly may also provide Apple with an entre into the digital reader market which is currently dominated by Amazon’s Kindle.  With a large colour screen and wireless access the device appears to be ready-made for an assualt on one of the fastest growing market segments.

And why wouldn’t Apple have its eyes on this prize?

Have a look at some of the numbers. At least one analyst of Amazon’s business (Sandeep Aggarwal of Collins Stewart) has forecast US$2 billion of revenue for the Kindle by 2012. This is revenue not solely derived from hardware sales but from the eco-system that surrounds it.  Apple makes enviable profits from those $0.99 downloads on iTunes.  The margins in ebooks should be at least as good.

In its first full year of sales back in 2002, Apple sold just under 400,000 iPods. Two years later that number was approachng 4.5million.

By comparison in its first year of sales Amazon has sold over 500,000 units.

Apple is a savvy operator and arguably the best in the business at developing products that change the way we live, work and play.  The Apple tablet will just not be a bigger iPhone or iPod Touch: it’s going to change the way we buy books.