After attempting and failing to sell pricier tablets to customers, Amazon is reportedly now looking to launch a $50 tablet for budget-conscious customers within the year.
The device would be geared towards buyers that are looking for a simple tablet for straightforward uses such as doing online shopping on Amazon and streaming videos.
Sources familiar with the matter revealed to the Wall Street Journal that the tablet, which will be half the price of Amazon's 6-inch Fire HD tablet, will also feature a 6-inch screen and will be released in time for the holiday shopping season.
However, a cheaper tablet will most likely come with sacrifices in quality. While the exact specifications of the device were not revealed, one of the sources said that the $50 tablet will come with a mono speaker instead of stereo.
Sources added that the $50 tablet is just one among the devices that Amazon is looking to release within the year, with other devices including tablets that feature screens measuring 8 inches and 10 inches.
The downsizing of Amazon's tablet offerings are in stark contrast with what Apple is doing, as the tech giant is all set to unveil the plus-sized, 12.9-inch iPad Pro in its upcoming Sept. 9 event.
Along with Apple, Amazon will face the challenge of attracting consumers to buy tablets in a market where interest in the devices has been decreasing, mostly due to limitations on upgrades and lacking innovations in hardware. According to the International Data Corporation, the worldwide tablet market saw a 7 percent decline for the second quarter year over year, with tablet sales mostly being erratic over the past several quarters due to market saturation and tougher competition.
Amazon is now looking to bounce back in the market beginning with its $50 tablet.
Amazon CEO Jeff Bezos initially set an internal price tag goal of $50 for the company's Kindle e-reader and Fire tablet, with the low prices seen as an important factor in luring budget-minded users. However, the e-reader screen technology has cost too much to lower the retail price to that amount, with the cheapest Kindle by Amazon selling for $79.
"Will people tolerate a potentially inferior experience just because a tablet is $50?" said Forrester Research analyst Frank Gillett." Amazon has to be very careful about what they're giving up to get to that low price point."
A spokeswoman for Amazon declined to comment on the matter.
Amazon is still reeling from a $170 million write-down that it announced in October of last year that was incurred due to unsold inventory of the Fire smartphone, which was priced similar to the iPhone. Sales for the smartphone flopped, despite the inclusion of a free year of Prime membership worth $99.
