Online Retailer Amazon is set to release a 7-inch Kindle Fire with higher resolution screen later this year, all for $199. This could push them to sell their current e-reader model at a lower price of $149.
Expanding Market Share
DigiTimes reported last Friday that Amazon is “considering launching” a new lineup of eBook readers during the third quarter of this year. This includes a 7-inch Kindle Fire, which features a screen resolution of 1280 x 800 pixels. The upcoming tablet is said to carry a price tag of $199.
On the other hand, this could prompt the online retailer to sell its current 7-inch Kindle Fire at a lower price of $149. Boasting 1024 x 600-pixel display, the less expensive model is seen as Amazon’s attempt to expand its market share. DigiTimes also added that this is their way of giving space for their upcoming device. As stated by sources from upstream supply chain:
To expand its market share, the sources believe Amazon has a high chance of adopting a similar product strategy to Apple, in addition to a new iPad product, Apple continues to sell its previous model at a cheaper price to expand market share into the lower-end segment.
Decrease in Demand for Kindle Fire
Prior to this, there were reports that the retailer is working on another eBook reader with larger screen. In fact, they were expected to release an 8.9-inch and 10.1-inch tablet earlier this year. But it turns out that Amazon has changed its plans. There were also rumors that the online retailer halted the production of their alleged 8.9-inch eBook readers, while the larger tablet is expected to hit the stores later this year or earlier next year.
Kindle Fire has a strong start last year, becoming the second most popular tablet next to Apple iPad. But the demand for the eBook reader quickly collapsed afterwards. According to a survey that ChangeWave released earlier this month, the device’s decrease in demand is due to the fact that its customer satisfaction was unable to surpass even just half of the iPad 3.
Kindle Fire’s consumer-friendly price and functions allowed Amazon to achieve sales of 4.5-5 million units in the fourth quarter of 2011. However, because the device is mainly targeted at the US market, sales quickly dropped to only 700,000-800,000 units in the first quarter of 2012.
Other than the Kindle Fire, Amazon is also rumored to release a 6-inch e-ink based Kindle reader. Scheduled to hit the stores on the third quarter of 2012, the device will also feature an integrated backlight. In addition, other readers of various sizes are also in the works and are expected to land on shelves later this year.