Amazon's $50 Tablet Aims At Bargain Shoppers

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Online retail giant Amazon is purportedly planning to release an ultra-budget tablet device from its Fire line of devices after having struggled to compete in the tablet marketplace, according to a report in The Wall Street Journal.

The report, which quoted unnamed sources familiar with the matter, said the 6-inch tablet would be released in time for the lucrative holiday shopping season and be priced at only $50 -- half the price Amazon charges for its cheapest tablet, the 6-inch Fire HD.

In an effort to hit the $50 price point and still be profitable, Amazon will have to drop or reduce the quality of certain features, according to one source, by removing a stereo speaker and replacing it with a mono speaker.

The source also revealed that Amazon CEO Jeff Bezos originally wanted both the company's Kindle e-reader and the Fire tablet to have a $50 price point, but the technology behind the Kindle's screen made that impossible.

"Will people tolerate a potentially inferior experience just because a tablet is $50?" Frank Gillett, a Forrester Research analyst, told the paper. "Amazon has to be very careful about what they're giving up to get to that low price point."

Amazon already markets at 7-inch Fire HD tablet for $99, and the company has focused on its huge content library as a main selling point, though that hasn't appeared to connect with consumers.

The company also faces competition from a variety of low-cost tablet manufacturers like Asus and Lenovo, which offer better quality screens and processors for comparable prices.

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Overall, the tablet market faces challenges from smartphone makers, who have been steadily increasing the sizes of their screens and provide the versatility that users who consume mobile video content are looking for. The rise of phablets, a combination of tablet and phone, is an example of this desire.

A July report from IT research firm IDC found the worldwide tablet market declined 7 % year-over-year in the second quarter of 2015 with shipments totaling 44.7 million units.

Amazon didn't even crack the top five ranking of vendors, which was dominated by Apple and Samsung. Apple alone controls nearly a quarter of the market, followed by its Korean rival with 17%.

Owing in part to limited hardware innovation and lackluster vendor portfolio updates, the market also declined 3.9% compared to the first quarter of the year.

However, the report also noted things could change if tablet makers explore new form factors and productivity features, something recent releases from Lenovo and Acer offer.

Lenovo, the number three player in the tablet market, released the Yoga Tab 3 and Yoga Tab 3 Pro at the IFA convention in Berlin earlier this month -- the Pro boasts a built-in 70-inch projector and four front-facing JBL speakers.

Market leader Apple is also rumored to be updating its iPad line of tablets with the iPad Pro, which could feature a huge 12.9-inch screen, differentiated software, an improved keyboard, and split-screen multitasking capabilities.