Tesco to release tablet computer to take on Amazon and Apple

Retail giant Tesco will launch cut-price device in time for Christmas

Supermarket giant Tesco is to step up its battle with Amazon and Apple by launching a keenly priced tablet computer in time for Christmas.

The company, which has had its profitable entertainment business hit by Apple and Amazon, is to pre-load the iPad-like device with e-books, films and music, according to newspaper reports.

Sources said that although a price was not set for the tablet, it would be of a "high quality" similar to Amazon's Kindle Fire, which retails at £129. Some reports have suggested that the price could be as low as £99.

The anticipated launch is part of the company's bid to better connect with shoppers who have been inclined to shop around as a result of the recession putting a strain on shopping budgets.

Tesco has already put in place plans to launch two specialist websites for e-books and music later this year.

The company has also hired Facebook's head of retail for EMEA, Gavin Sathianathan, to lead Blinkboxbooks, while Mark Bennett, a former EMI and Warner Music executive, has been snapped up from Sainsbury's digital entertainment unit to run Blinkboxmusic.

Blinkbox is the streaming television service that Tesco acquired in April 2011 in order to join "the battle for the living room".

The two sites will sit alongside the Blinkbox online film store, which competes with Amazon's LoveFilm and Netflix.

Tesco also plans to launch a new Clubcard TV channel, and all of these services alongside a tablet device could enable the company to gain an enormous amount of data that it could use to better understand - and therefore sell to - customers.

Last year, Tesco boss Philip Clarke admitted that the retailer uses Clubcard data to target consumers according to their wealth, with initial tests showing an increase in sales of 10 per cent.

In July, Computing looked into the possibility of companies such as Tesco overstepping the mark and exploiting their customers' trust by using their data for reasons other than those they disclose.

We asked whether the likes of Tesco and Marks & Spencer could gather data from shopping choices to increase the price of services such as life insurance.

The Office of Fair Trading (OFT) then launched an investigation into the extent to which businesses are using customer data to target consumers with personalised prices.

The OFT said it was disappointed with the level of transparency by businesses about what information they collected and how it was used, and has written to a number of online businesses to outline its findings and to provide advice on how they can be more transparent about their practices.