Amazon.com unveiled a cheaper, voice-assisted version of its Fire tablet in a continued push beyond its online retail business, even as the global market for tablets remains in a slump. 313x39
The new comparable model was $149.
While Amazon's core business remains selling goods online, it has been expanding into low-cost gadgets like tablets as a way to enter the homes of more people and convert them into loyal Amazon shoppers. The company sees customer retention as a way to profitability, more so than making money on individual gadgets.
"We believe in a different approach to tablets - providing products at non- prices - and customers love it," Kevin Keith, general manager of Fire tablets, said in the statement. Amazon has more than doubled its Fire tablet sales year over year, he said.
The Fire HD 8 will compete with incumbents such as slowing 12 percent this year. Tablet sales have been declining as smartphone screens get bigger and blur the distinction between the two. Amazon's strategy to cut prices and go for volume may be wise in such conditions, according to IDC.
"We see smaller slate tablets being offered at very aggressive price points, leaving little room for revenues outside of a pure volume or platform play like for Amazon," Jean Philippe Bouchard, a research director at IDC, said in the August 30 forecast.
© 2016 Bloomberg L.P.