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The device as loss-leader for fatter-margin content delivery.  Courtesy of Amazon

Amazon wants to sell you a $50 Fire tablet

Sep 08, 2015

Amazon Inc. (amzn) is preparing to launch a new basement-priced version of its Fire tablet this fall in a fresh attempt to crack the market for smart devices and get its book and video content out to more people for less.

According to The Wall Street Journal, Jeff Bezos' company wants to bring a new Fire tablet with a 6-inch screen to market for as little as $50, around half the price of its current 6" Fire HD tablet, in time for the holiday season. It's also looking to put out new devices with 8-inch and 10-inch screens, the WSJ said. It didn't say what the bigger models would cost.

At the bottom end of the range at least, the devices won't be priced to make a profit. The dirt-cheap price tag is intended to maximise the reach of its e-book and Amazon Prime video streaming content.

Amazon is still licking its wounds after its Fire smartphone flopped last year, leading it to take a $170 million write-off against unsold inventory.

The WSJ speculated that the devices may struggle to make an impact in the U.S. market, where consumers are typically willing to pay more for higher performance (it noted that the $50 Fire's speaker will be mono, rather than stereo). However, it may find buyers more easily in the global market, especially as the dollar's rise against many emerging market currencies puts pressure on local spending power.

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