Amazon plans to release a 6-inch tablet costing only USD 50 in time for the holidays, people familiar with matter told the Wall Street Journal. At this price point, the new tablet will cost half as much as the current Fire HD 6-inch tablet. The new product will have a mono speaker, rather than stereo, according to one of the persons. To keep costs low, much of the tablet’s development was outsourced to Shanghai Huaqin Telecom Technology, Compal Communications and others. Neither would comment. Amazon will also launch 8-inch and 10-inch tablets this year.
Amazon CEO Jeff Bezos has said that the company would rather make money by selling services for the devices, such as video rentals and e-books, than from the devices themselves. He is said to have wanted a USD 50 price tag for the Kindle and Fire tablet, but the Kindle’s screen technology was too expensive to do so. Today, an entry level Kindle costs USD 79. When Amazon priced its Fire smartphone at the same level as the iPhone, sales were poor and the company announced that it would write off USD 170 million, mainly for unsold inventory.
Wal-Mart and Amazon sell several 7-inch tablets for about USD 50, including relatively unknown brands RCA, Ares and Ematic. In the second quarter Amazon had an under 1 percent share of the US tablet market, compared to Apple and Samsung with 42 percent combined, according to IDC data.
