With a prominent hardware failure in its not-so-distant history, and with the tablet market flat-lining, Amazon may be planning to shake things up with a new device for the all-important holiday shopping season.
According to The Wall Street Journal, the online retail giant is prepping a new 6-inch Fire tablet with an eye-poppingly low price of just $50. That's far less than anything it offers now (the current Fire HD 6 is $99), even when it drops the price during sales (usually to $79). The Fire HD includes ads to help lower the price, but it's unclear if this new device would also offer this "bonus" feature.
The WSJ report claims that while Amazon was able to cut costs enough on the Fire to reach the $50 price point -- which CEO Jeff Bezos claims is crucial to reach a new customer segment -- by outsourcing its development, it was unable to reach the same pricing for its Kindle e-reader (thanks to its more expensive screen). That move to overseas development apparently ruffled feathers with the company's Lab126 hardware unit, which has taken heat for the Amazon Fire smartphone flop and recently suffered a round of layoffs.
That fiasco, along with disappointing sales of pricier Fire tablets, led Bezos to turn Amazon's device strategy towards cheaper hardware. The firm would lose bigger margins on the device sales, but allow it to sell more goods, whether in the form of Prime memberships, streaming services, or other digital media items.
Of course, there are numerous cheap tablets that are priced at $50 or under, most with larger screens, available from third-tier vendors and in locations like drugstores. None has the market power of an Amazon, however, or the customer service reputation that might make buyers feel a little more comfortable purchasing such an inexpensive device.
Amazon's down-market tactics would fly in the face of what could be an opposing strategy from Apple, which appears ready to announce an iPad Pro with a larger screen -- and presumably higher price tag -- to tap into the lucrative enterprise market. That could be because Apple is seeing its iPad mini sales dry up due to larger smartphones (a.k.a. phablets), which could be a potential stumbling block for a 6-inch tablet.
Then again, Amazon is likely looking to reach buyers that don't own such a phone and see tablets as a luxury item. According to the WSJ, it isn't planning to stop with the $50 6-inch Fire tablet, as the company plans to offer new 8-inch and 10-inch slates while killing off a proposed 14-inch tablet.
The rumored gambit could boost sales for a once-hot tablet market that has stagnated over the past couple of years. It could also fail if the hardware is too cut-rate (for instance, it will come with a mono speaker than stereo ones), or if the buyer segment Bezos hopes to reach is still resistant to tablets even at a minimal price point. Would you purchase a $50 Amazon tablet? Will this help resuscitate the tablet market, or is Apple's iPad Pro strategy offer a better chance? Let us know in the discussion section below.