In an attempt to improve sales of already popular Kindle Fire HD media tablets, Amazon on Wednesday reduced the pricing of the 8.9” slate in the U.S. and began selling the product in select European countries and in Japan. Thanks to even more affordable price and advanced capabilities of the tablet, the Kindle Fire HD 8.9” will add intense competition to the market of inexpensive slates.
Effective immediately, Kindle Fire HD 8.9” with retina-class high pixel density displays now costs $269 for Wi-Fi-only version as well as $399 for the model that is equipped with both Wi-Fi and 4G/LTE connectivity. The Kindle Fire HD 8.9” is also now available in the UK, Germany, France, Italy, Spain for £229 or €269 and in Japan for ¥24800. Amazon also sells Kindle Fire HD 7” for £159 in the UK, €199 in Eurozone and ¥15800 in Japan.
“We are thrilled with customer reaction to Kindle Fire HD 8.9”. Customers tell us they love our large-screen version of Kindle Fire HD for web browsing, email, gaming, watching TV shows, reading magazines, and more. As we expand Kindle Fire HD 8.9” to Europe and Japan, we have been able to increase our production volumes and decrease our costs. Across our business at Amazon, whenever we are able to create cost efficiencies like this, we want to pass the savings along to our customers,” said Dave Limp, vice president of Amazon Kindle.
The price slash of Amazon Kindle Fire HD 8.9” happens shortly after Acer Group and Asustek Computer introduced aggressively-priced 7” and 10” media tablets based on Google Android with more or less decent hardware inside that cost from $149 to $299 with potential for further decreases. In addition, back in October '12 Google introduced its own Nexus 10” tablet with extreme 2560*1600 display resolution and powerful quad-core Samsung Exynos 5250 system-on-chip for $399 - $499 (but without any type of WWAN support), which clearly offered serious competition to both versions of Kindle Fire HD 8.9”.
Kindle Fire HD tablets come with 7" (1280*720) and 8.9" (1920*1200, 254 ppi) high- definition screens with 10-point multi-touch and are powered by Texas Instruments OMAP 4460 or 4470 system-on-chip devices with two ARM Cortex-A9 cores and PowerVR SGX 540 graphics adapter. The new Kindle Fire HD tablets also come with 16GB, 32GB or 64GB of storage and are equipped with improved 802.11abgn Wi-Fi, front-facing cameras for communications, advanced audio processing capabilities with Dolby Digital Plus support and so on. Finally, the most advanced Kindle Fire HD 8.9 models also support built-in 4G/LTE module (wireless Internet access contract costs $50 at Amazon) that works out-of-the-box. Amazon Kindle Fire tablets runs proprietary version of Android that requires specially developed apps available only from Amazon.
It is widely known that Amazon makes no profit selling its Kindle and Kindle Fire hardware, such as electronic book readers and media tablets. At the same time, unlike suppliers of video game consoles, it also does not sell its devices at a significant loss.
Amazon sells various versions of its Kindle Fire and Kindle Fire HD media tablets for $159 - $399. The company hopes that aggressive pricing will catalyze more people to obtain media tablets and eventually make purchases of applications, electronic books, music, movies and other types of content, which will create profits for the company. Considering the fact that Kindle is an extremely-closed eco-system, customers are basically forced to make purchases from Amazon, not from other providers.
"We sell the hardware at our cost, so it is break-even on the hardware. We are not trying to make money on hardware; we want to make money when people use our devices, not when people buy our devices. After you buy Kindle Fire HD, you may use it to buy books, games, movies and so on. So that continuing relationship with the customer is what we hope to make money on over time," said Jeff Bezos, the founder and chief executive officer of Amazon, in an interview last year.