If Amazon want a successful Android tablet with a volume of sales to make them a player in the tablet space, they’re going to need to price it incredibly competitively, not as low as the Touchpad clearance, but around the $200-$300 mark. Which means that they’ll be reliant on making up that difference on the other side, through App Stores, music sales, Kindle downloads and other incidentals (the so-called Nintendo method).
But if the tablet priced is priced that competitively, my suspicion is that any “Amazon branding” and lock-in to their stores and revenue streams will be rooted away in a matter of hours and they’ll be subsidising a lot of hacker tablets in the wild. The smart thing will be to have a soft-lock to Amazon that can be legitimately circumvented (thus keeping the free/open source community advocates happy) but has enough roadblocks to keep the majority of people in their domain.
The knowledge gained from the Kindle sales patterns will be useful, but this is going to be a fine balancing act. The success of the Amazonian Android is likely to come down not on hardware, design, or ease of use, but on the probability, prediction and accuracy of the customer usage model.