Rumblings suggest Amazon may be preparing to simultaneously unveil an updated Kindle Fire 2 tablet while slashing the price of the existing Kindle Fire to $149.
First up with the Kindle Fire rumors is DigiTimes with a report claiming that "sources from the upstream supply chain" believe that Amazon is in a position to be able to cut the price of the 7-inch Kindle Fire by $50 -- while at the same time launching an updated 7-inch tablet at the old price tag of $199.
(It's probably worth noting DigiTimes' track record far from perfect, so it's worth taking this with a hearty dose of salt to be on the safe side.)
This is similar to Apple's strategy with the iPad, when during the launch of the iPad 3 it kept the iPad 2 in its inventory at a new and reduced price.
One possible way for Amazon to cover the price cut is through the use of and ad subsidy model such as that currently being used on the $79 Kindle 'with special offers' e-book reader.
The Kindle Fire is currently the bestselling Android tablet by a significant margin, owning over 54 percent of the market.
The report claims that the Kindle Fire 2 -- or whatever it ends up being called -- will have a screen resolution of 1280 x 800. The report also claims that Amazon is also working on 8.9-inch and 10.1-inch tablets; though development has been halted on the 8.9-inch model while the 10.1-inch model could be released in or around Q4 2012---Q1 2013.
Sister site CNET understands the Kindle Fire 2 could feature a camera and physical volume-control buttons --- two features that the current Kindle Fire lacks.
It seems that after setting a $199 price bar that other tablet makers had to limbo beneath, Amazon could be getting ready to lower that entry level price point considerably.
Image source: Amazon.
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