Amazon.com Inc. plans to release a US$50 tablet with a six-inch screen in time for the holiday shopping season.
The move comes as the world’s largest online retailer struggles to draw customers to its pricier tablets.
The Wall Street Journal is reporting that the tablet is likely to come with inferior screen quality and shorter battery life compared with Amazon’s more expensive Fire tablets and industry-leading devices such as Apple Inc.’s iPad.
However, it could appeal to users looking for a simple device for straightforward tasks such as streaming video at home and shopping on Amazon.com.
The US$50 device is part of a slate Amazon is planning to release this year that will also include tablets with eight-inch and 10-inch screens.
Amazon has long sought to undercut its hardware competitors, in part by eschewing profits on the devices themselves.
Chief executive Jeff Bezos prefers to make money by selling services that work with the devices such as e-books and video rentals.
Bezos had set an internal goal of the US$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.
But the e-reader screen technology from its vendors ultimately proved too expensive to drop the retail price, sources said.
Amazon faces potential new challenges as Apple may introduce new versions of its popular iPad and iPad Mini tablets as soon as Wednesday, along with new iPhones.
Critics blasted Amazon for pricing its Fire smartphone equal to the iPhone last year, despite throwing in a free year of US$99 Prime membership.
The handset’s sales fizzled and steep price cuts couldn’t boost sales.
In October, Amazon said it would take a US$170 million writedown primarily for unsold inventory.
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