Amazon To Cut $50 Off The Fire, Release A 10.1-inch Model And New $199 7-inch, Says Report

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Amazon is prepping a 7-inch $199 tablet for a third quarter release, reports Max Wang for Digitimes. Reportedly, this tablet will have better specs than the Fire with a higher quality screen and more than likely a more competent computing platform. The original Fire will then get cut to $150. Then, later in the year or maybe in early 2013, Amazon will release a 10.1-inch model. This comes by way of an “upstream supply chain” source. Digitimes is as sketchy as trade publications get, but logic dictates that there is some truth here.

Amazon will release a new Fire model this year. That’s a given as Amazon will likely try to replicate last year’s stellar holiday season lead by the first Fire. A larger model is likely in the cards, too, although I wouldn’t say it’s a lock for this year.

Amazon has long found success by releasing new Kindle hardware at a lower price point. The original Kindle started out at $399. A Kindle is nothing more than a hardware portal to Amazon’s massive marketplace. Unlike competitors in the tablet space, Amazon can afford to sell hardware at a loss as long as the loss revenue is compensated by Amazon purchases. Amazon’s end game doesn’t involve besting Apple, Samsung or Motorola in the tablet game, but rather selling more wares.