Feature

Why a rumored $99 Amazon Kindle Fire makes sense

If Amazon were to sell its tablet for less than $100, it would put Apple and others on notice

If a new rumor from TechCrunch is to be believed, Amazon is working on a 7-inch Kindle Fire HD that'll cost just $99. That's half the $199 price tag of the current model, with more or less the same specs.

Dare we dream? Amazon denies the rumors, telling PC Magazine "we are already at the lowest price points possible for that hardware." Analyst Tom Mainelli, however, tells TechCrunch that $99 is perfectly feasible:

If they can sell the product at roughly what it costs to build, that fits their long-term vision to make money selling you content on that device. It's entirely possible — physically possible — to create a device that costs $99, particularly at the scale that Amazon would do it. [TechCrunch]

Jay Yarow at Business Insider points out that Texas Instruments, which manufactures the Kindle Fire processor, "shut down its tablet chip making operations, so it's possible Amazon got a clearance sale price on the chips." Even if Amazon couldn't get its manufacturing costs down to $99 per tablet, "taking a loss on tablet sales wouldn't be a big deal," says SlashGear. Why? Because the Kindle Fire's modified Android interface is geared toward one thing: Getting users to buy from Amazon's massive library of movies, books, magazines, and more, as well as get more people hooked on Amazon Prime, its $79-per-year service that offers two-day shipping and streaming video.

Adrian Kingsley-Hughes of ZDNet says a $99 Kindle Fire HD "would have the biggest effect on the tablet market since Apple released the iPad." Yes, it's that big of a deal, says Ben Lovejoy of 9to5Google:

Of course, there are no shortages of cheap tablets, some refurbs even going as low as $50. What all the devices at that kind of price-point have in common, however, is that they are all utterly appalling. Most have less-responsive, resistive — rather than capacitive — touchscreens, run ancient versions of Android, and don't have access to the Play Store. The challenge is to create something usable in the double-digit price range, and that means enough processing power to handle HD video or at least at 720p. [9to5Google]

Amazon may very well be telling the truth that there's no $99 Kindle Fire HD in the works. Farhad Manjoo's recent prediction that Amazon would give away its Kindle e-reader for free has, sadly, not come true. Still, as Lovejoy notes, at some point this year, "we're going to see a usable 7-inch tablet break the $100 barrier and likely some happy kids at Christmas." Amazon might as well do the honor.

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