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