Rumor has it that Amazon is struggling to sell its more expensive Fire tablets. The company has been releasing its Android-operated but Fire OS-coated tablets for a few years with competitive pricing, but even that doesn't seem to be enough to keep it balling as hard as it wants and in the big leagues. Last year, it barely held 1% of the US tablet market according to IDC, compared to Apple and Samsung that had a combined 42% share.
Amazon's Fire HDX 8.9" can go up to more than $500, which may be a bit too much to pay for a screen you consume books and movies on and buy Amazon stuff from. Its cheapest (and yet very convincing) HD 6 tablet starts at $99, but that may still be a higher entry point price than what customers are willing to pay. Amazon is thus planning to release a $50 tablet in time for the holidays, undercutting its current entry-level by half, the Wall Street Journal reports "according to people familiar with the matter."
The price drop means a few compromises will be made, like a mono speaker, and potentially a lower quality 6" screen. There may be other corners cut in the areas of battery life and build quality. Speaking of the latter, it appears that Amazon has outsourced production to overseas firms in Shanghai and Taiwan. With such a low price, Amazon's strategy won't be based on profiting from the tablet's sales, but the services it will deliver to customers, like Amazon Prime and various content susbscriptions (videos, music, ebooks, tv series, and more). And although the WSJ isn't clear on whether this $50 price includes the screensaver ads that Amazon has been using to further subsidize its tablets, I'm willing to bet it does.
The $50 6" tablet will be part of a larger line-up including 8" and 10" members, but there's no word on the specs or prices of those. Obviously, Amazon spokespersons declined to comment to WSJ, but the journal's track record with rumors is usually spot-on.
- The Wall Street Journal