For the original Kindle Fire, ASUS Nexus 7, and now the Kindle Fire HD, the rock-bottom $199 price is a major selling point. It turns the tablets into devices that could be reasonably bought for luxury alone, without the buyer’s remorse that might come with purchasing a much more expensive tablet only to use it just for Netflix. Of course, the price of these content-based devices can be low, because neither Google nor Amazon make much money on the hardware and instead get most of their profits through the online storefronts that the hardware presents.
So, it makes a lot of sense that according to a new rumor, Amazon is currently working a dirt cheap $99 Kindle Fire HD. This new 7-inch Kindle Fire HD would have the same 1280 x 800 display as the current 7-inch Fire (and Nexus 7), as well as a TI processor. Not much else is known about the device, but if it is anything like the current Kindle Fire HD, then it should have dual-driver speakers, dual-antenna WiFi, 16GB or 32GB storage options, and of course Amazon’s extremely customized version of Android.
However, Amazon would have to be pretty sure that its new tablet would drive online sales in order to sell it at such a low price. Currently, the 7-inch Kindle Fire HD costs about $174 to build, so even though parts should get cheaper, I doubt that Amazon will be able to get the manufacturing cost of a new Kindle Fire down to under $100. Perhaps it could get close if it struck a great deal with a supplier, but I don’t think that is very likely. As a result, either Amazon will be taking a significant loss if the new Kindle Fire HD costs only $99, or the price won’t really be that low.
Still, I think it quite possible that Amazon is working on making the Kindle Fire cheaper, even though the company said that the $99 price couldn’t happen with current hardware. Selling a tablet with roughly the same specs as the current Fire HD or Nexus 7 at about $150 seems quite doable, and would still be quite the bargain. And in any case, if the new Nexus 7 has even some of the rumored features and keeps its $199 price point, the only option for tablets with lesser hardware will be a price drop. The only question is how much.[TechCrunch]