TechCrunch has reported on rumors of a $99 7-inch Kindle Fire HD in the works, following earlier speculation about both Google and Acer tablets at the same price-point.
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.
If TechCrunch‘s sources are right, and they do seem remarkably specific, the new Amazon tablet supposedly shipping this year could be that device:
According to what we’ve heard, the $99 Kindle Fire HD will also still sport a TI processor like the rest of the lineup, and will have a 1280×600 resolution, like today’s Kindle Fire HD 7″ does.
Update: Amazon has told BusinessInsider that it is not readying a $99 Kindle tablet: “It’s not happening–we are already at the lowest price points possible for that hardware.”
IDC Research Director Tom Mainelli said the rumour is credible because Amazon doesn’t need to make its money on the hardware.
The infrastructure is definitely in place for Amazon to go even lower. 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.
Amazon CEO Jess Bezos has previously confirmed that it sells hardware at cost to maximize sales opportunity for books.
There have been suggestions that the Asus ME172V may be Google’s $99 tablet, with a 1Ghz CPU and a 400MHz Mali GPU driving a 1,024-by-600 screen. Geek.com, in the meantime, said Acer is working on a similar 1.4GHz dual-core processor with the same screen resolution and 1GB of RAM.
While the credibility of some of the specific claims may be questioned (especially when some of them originate from the notoriously unreliable Digitimes), the likelihood that all of them amount to nothing seems slim. At some stage this year, possibly as soon as Google’s I/O developer’s conference in May, we’re going to see a usable 7-inch tablet break the $100 barrier and likely some happy kids at Christmas.
Will this threaten Apple’s market and margins? So far, the company has remained relatively immune to the influx of cheaper tablets, but as CEO Tim Cook has himself said, if Apple doesn’t cannibalize its own market, someone else will. A decent $99 tablet will pull down prices of better-specced ones, and no brand —not even one with the halo effect enjoyed by Apple— can remain immune to market forces forever.