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Is Tesco poised to take on Apple and Amazon in the war of the tablets?

Tesco is said to be planning its own tablet computer this year to win back book and DVD sales from technology giants Apple and Amazon.

Priced at around £100 to compete with Amazon's Kindle Fire, the tablet is expected to come pre-loaded with content and apps including Tesco's new movie, music and e-book subscription service Blinkbox.

The move is part of a far-reaching turnaround plan that has already seen it snap up family-friendly restaurant chain Giraffe and Harris + Hoole coffee shops.

Tesco declined to comment on the report but the supermarket has been looking to reinvigorate its business since annual profits fell for the first time in decades in April, while it was recently forced to scrap a high-profile expansion in the US.

It recently unveiled a new-look 'hypermarket' in Watford - one of its largest shops in the UK - which incorporates outlets such as Giraffe as it seeks to become known as a retail and leisure destination as well as a supermarket chain.

A tablet computer would tie in with Tesco's other branded offerings such as its mobile phone and banking services.

As more music and film downloads are made on portable devices, it could also tackle leaking market share to technology companies through devices like the iPad.

Ovum technology analyst Nick Dillon said Tesco could either place its name on a pre-made tablet in a so-called white-label approach, or follow Amazon in creating its own operating and ecosystem.

"The risks are quite high for a fully-integrated strategy because Tesco is not a technology company, but the rewards would be high too," he said.

Tesco is not the first supermarket to dip its toes into the lucrative tablet sector, with its rival Asda becoming the exclusive retailer a couple of years ago for a £100 device called Arnova 8.

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