Beyond the undoubted success of the Kindle ereader and early success of Fire TV, Amazon.com Inc hasn't had the greatest success with its hardware efforts. It's Kindle Fire tablets have failed to set the world alight and the company's one and only smartphone was a complete failure. Now the company is looking to use price as a way to attract customers.
According to a report in the Wall Street Journal, Amazon will launch a 6-inch Kindle Fire tablet that will cost just $50, in time for the holiday shopping season. The very aggressive pricing will mean the tablet will cost less than the company's cheapest Kindle ereader, which currently costs $79, and will be half the price of the company's cheapest tablet.
The move to launch a tablet that is likely selling at cost -- or even below it -- is nothing new for Amazon as it looks to recoup profits from sales of content on its devices through its own online stores. Even for Amazon, however, a $50 tablet is going to be a struggle, and it will mean sacrifices in hardware, with the sources speaking to the Journal saying the new tablet will only have a mono speaker.
Rather than being developed at Amazon's own hardware hub, Lab126, a lot of the design and manufacture of the device has been outsourced to China and Taiwan in a bid to cut costs. The 6-inch Fire tablet will be just one in a range of new tablets from Amazon launching this year, including devices with 8-inch and 10-inch screens, all of which will run Amazon's version of Android, which is known as Fire OS. Amazon has forked Google's mobile operating system and sells apps, books, music and videos through its own online stores, allowing it to recoup lost profits on hardware.
Amazon's CEO Jeff Bezos has also apparently set an internal goal of bringing the cost of the cheapest Kindle ereader down to $50, as the company makes an aggressive play for the mass market.
Apple Inc. is expected to refresh its own market-leading tablet lineup at its iPhone 6s event Wednesday, with a new iPad mini and an all-new iPad Pro. While Apple's tablets are priced much higher than Amazon's they do offer a much more premium experience and it is unclear if people are willing to give that up completely just to get a $50 tablet.