Amazon will reportedly unveil a $50 6-inch Fire Tablet later this year

Amazon’s Kindle Fire line of tablets has been around for quite a few generations now, and with each one there has been further refinements and spec boosts. Last year saw the release of a much different device however, in the form of the Fire HD 6 which offered reasonably good specs at an impossibly low price tag: $99.

This year however, Jeff Bezos and Company may be introducing an even more affordable entry. According to a report by The Wall Street Journal, Amazon will unveil a new 6-inch device in time for the holidays that will retail for just $50.

As of this moment, exact specs are unknown. The picture painted in the source story suggests a truly budget device, with “people familiar with the matter” indicating the device will forgo stereo in favor of a single, mono speaker. The tablet is expected to be joined by 8-inch and 10-inch variants, though no information was provided as to the nature of either’s cost or expected internals.

Also unknown is clarification as to if the price will only be for those units sold with embedded advertising. In the past, Amazon has charged a slightly higher price tag for products that come devoid of the marketing strategy, though it is difficult to imagine this product retailing for under $50.

The Wall Street Journal

Apparently, Jeff Bezos has been interested in this price point for some time now, as he “had set an internal goal of the $50 price tag for versions of both the Fire tablet and Kindle e-reader, viewing the rock-bottom prices as a crucial lure for a more cost-conscious group of buyers, the people said.” Unfortunately due to costs associated with purchasing e-ink screens for Kindle products, it was apparently not possible to achieve this target.

Why go low?

While Amazon has always been about offering products and services at affordable prices – even at the expense of its own profits – the idea of a low-end Fire tablet may seem confusing to some. After all, this is the same company that was put a QHD display in the Fire HDX 8.9. The issue itself is seemingly two fold:

Amazon’s internal struggles

In late August, the WSJ published a story claiming that “in recent weeks Amazon has dismissed dozens of engineers who worked on its Fire phone at Lab126, its secretive hardware-development center in Silicon Valley, according to people familiar with the matter.” This was of great significance as “the layoffs were the first in the division’s 11-year history, these people said.”

The dismissal was largely attributed to the failure of the Fire Phone, Amazon’s first formal foray into the mobile phone market. It packed some decent specs and nice “gimmicks” such as the inclusion of a unique “3D” type viewing experience and the ability to take a picture of any product and immediately find it at Amazon. Unfortunately, it was exclusive to AT&T, and it was expensive. Very expensive. So expensive was it that many predicted it would flop upon release. And it did.

Given the surprisingly profitable conditions Amazon is currently enjoying, it might seem paradoxical for the company to cut superfluous costs, however when it comes to tablets in particular, there is another – perhaps larger – issue that seemingly comes into play:

A tough time for tablets

The other problem Amazon is saddled with is a sluggish tablet market in general. A report from July indicated that sales have plateaued, due in part to the onslaught of phablets from any number of OEMs. Even Apple has seemingly been confronted with the conundrum as was reported last year, and as indicated by the lackluster iPad Mini 3.

While companies like Samsung continue to remain optimistic and release high-end devices like the Galaxy Tab S2, pricing has itself, become a problem. Granted there will always be those who wish to spend the extra cash to get the latest and greatest, consumers on a budget may be more inclined to look for other offerings that have comparable specs but cost half the price.

Amazon occupies a very unique niche in that, despite using Android for its tablets, the actual OS running on the Fire line is forked and does not ship with access to any of Google’s services, or the Google App library. While the company does include features like Mayday and seamless integration with the customer’s Amazon Account, those of a far more price-conscious nature may look elsewhere when push comes to shove, especially if they aren’t frequent shoppers and/or care about streaming media services.

Don’t write it off…yet

The WSJ’s story contained a critical comment from Frank Gillet, an analyst at Forrester Research: “Will people tolerate a potentially inferior experience just because a tablet is $50? Amazon has to be very careful about what they’re giving up to get to that low price point.” Indeed this an issue of major concern, because there is a tipping point wherein a product becomes too cheap just for the sake of price and consumers may actually shun it in favor of spending a bit more for a significant spec boost.

Still, while the idea of a $50 Fire tablet might sound like it couldn’t possibly be packing anything redeemable, this might not be the case at all. While only the speaker situation is “known”, it is probably safe to assume the product in question will have a standard definition display, a low-end SoC, and 1GB of RAM if that. Still, consider that Samsung has for years included sub-par specs on its lower-end tablets despite charging a pretty penny. Additionally, there are indeed a number of decent low-priced tablets available on the market that are still very usable and still perform adequately for their intended purposes.

The report indicates that in order to lower costs associated with this device, “Amazon outsourced much of the development to overseas firms including Shanghai Huaqin Telecom Technology Co. and Taiwan’s Compal Communications Inc…Compal has previously worked with Apple and Hewlett-Packard Co., among others.” Assuming the two anoymous individuals who provided the information are correct, clearly Amazon has chosen to go with established players in planning this out, even if the product wasn’t developed internally.

Wrap up

The idea of an inexpensive offering from Amazon is actually a very good idea. Families with small children arguably don’t need to break the bank and splurge on a powerhouse. If the device is primarily going to be used to play some light games, stream some music or movies, and perhaps read an occasional book, there is seemingly no reason why a $50 Fire Tablet isn’t a great idea. Amazon can offer a new product with its brand name and familiarity for an unbeatable price, and that goes a long way when push comes to shove.