Could a $50 Tablet This Holiday Season Help Salvage Amazon's Struggling Hardware Division?

Could a $50 Tablet This Holiday Season Help Salvage Amazon's Struggling Hardware Division?
Image credit: Reuters | Andrew Kelly
Amazon CEO Jeff Bezos
Former Staff Writer
2 min read

As Amazon has struggled to hit homeruns in the hardware category, the Seattle-based retail giant is slashing prices to new depths with a forthcoming $50 tablet this holiday season.

A $50 price tag is half the cost of Amazon’s current 6-inch tablet -- the Fire HD 6 -- and will also be one of the cheapest tablets on the market, according to The Wall Street Journal. Amazon’s next generation of devices will also come in 8- and 10-inch iterations.

The launch arrives on the heels of one of the company’s most resounding duds, its Fire Phone, which boasted top-tier pricing in line with the iPhone upon its launch. But last October, due to dreary sales, the company said it took a $170 million charge on unsold phones, and subsequently laid off dozens of engineers in its Lab126 hardware department. The Fire Phone has since been discontinued.

Related: All Prime Members Now Have Access to Amazon's Press-to-Buy Dash Buttons

Much of the criticism leveled at Amazon notes that its hardware launches tend to be conceived primarily as a means to facilitate Amazon purchases and not with user experience top of mind. Its recently launched Echo, for instance, is a cylindrical speaker device that plays music, reads the news, answers questions Siri-style -- and, of course, allows Prime members to add items to their shopping lists.

The same might be said of the forthcoming tablet. A $50 price tag probably means that the company will have to shirk on battery life, screen quality and other features, according to the Journal. Given that the profits on a $50 tablet might be slim, the company will instead look to generate revenue from e-books, video rentals and other consumable content.

As a result of recent missteps, Amazon has pulled the plug on recent hardware projects, including a projector, a smart stylus and a 14-inch tablet, according to the Journal. However, it is moving forward with a kitchen computer code-named Kabinet, a 3-D tablet and an e-reader batter that can last two years on a single charge.

Related: Amazon Expands 'Prime Now' Service, Offers Alcohol Delivery for First Time

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