A New York Post article commenting on the recent $99 HP TouchPad craze points to price as a main reason why no tablet has been able to topple the iPad’s top ranking. Given that many have attempted to match the iPad’s $499 price tag without much success, the report mentions that Amazon may stand the best chance by offering tablets priced “hundreds” of dollars less than the iPad. An aggressive pricing model might include Amazon accepting losses on the actual hardware in hopes that the sale of digital media such as apps, eBooks and video rentals will compensate for a device priced at a low margin. Unlike other manufacturers, Amazon certainly has the retail power to take such a risk.
But Amazon is rumored to be launching two versions of their tablet, a 7-inch and 10-inch model. While it is feasible that the 7-inch version with its supposed NVIDIA Tegra 2 processor could come in for well less than $499, it is hard to imagine the 10-inch model, which is said to be one of the first devices that will launch with NVIDIA’s quad-core Kal El chipset, will be able to do the same. That is unless Amazon is more than willing to accept negative revenues on the tablet, putting much faith on the device’s ability to generate revenues in other ways. There is always the possibility that Amazon takes an ad-subsidized approach such as the one recently introduced for the Kindle.
Amazon’s first Android devices have much of the tech world waiting in anticipation to see how the retailer approaches elements such as hardware and pricing, and for good reason. Could Amazon, as the New York Post piece suggests, stand the best chance of stealing the lead away from the iPad?