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Quick Notes: Inexpensive tablets à gogo
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  • September 30, 2011
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With the Amazon Fire suddenly burning at the front of bargain-conscious consumers’ minds, other cheap tablet news has been coming out of the woodwork. Let’s look at some of it.

Not sure how I missed noticing this. In a desperate effort to stem the tide of its stock slumping yesterday, Barnes & Noble knocked $25 off the price of its Nook Color tablet in an e-mail promotion immediately after the Amazon presentation, along with offering free shipping. It seems to be at full price on the website, however. But I’d expect the price to dip for everyone when the Fire actually starts to ship.

And remember that mysterious $35 tablet from the Subcontinent that sounds too good to be true and probably is? The Economic Times reports that India’s HRD Minister Kapil Sibal has announced the tablet will launch on October 5th. “This is not just a dream, it is a reality,” Sibal said. I don’t know about you, but I won’t be holding my breath. (Found via Engadget.)

Swinging back a little closer to reality, TechCrunch has rounded up a list of “The Top 6 Alternatives to the Kindle Fire”: six relatively inexpensive and powerful tablets that could also view Kindle content by dint of installing a Kindle app. The tablets include the Asus Transformer, the BlackBerry Playbook, the Dell Streak 7, the Archos 80 G9, the Nook Color, and the Velocity Micro Cruz T408. They most notably (and amusingly) don’t include any mention of the $300 7” Fusion Garage Grid tablet, which is in the same price range as several they do mention—not too surprising given the enmity left over from the “CrunchPad” debacle.

Speaking of the PlayBook, a number of different retail channels have been slashing the beleaguered BlackBerry tablet’s prices lately, but manufacturer Research In Motion wants to make it clear that it is not making any permanent price changes to the tablet. The company issued a statement to emphasize that “The official retail price of BlackBerry PlayBook has not changed.” (Found via our sister blog Gadgetell.)

So how can Amazon afford to ship its Kindle Fire tablet for just $10 more than the ad-free retail price of its 3G Touch Kindle? They’re just doing “The same thing we do every night, Pinky!”—intentionally taking a loss to grow the market. CNET reports that Piper Jaffray analyst Gene Munster estimates the total manufacturing cost of each Kindle Fire to be $250, meaning that Amazon would take a $50 loss on each unit.

It’s the old “razors and blades” strategy again. Since Amazon can no longer discount the “blades” due to agency pricing, all that was left was to shave costs off the “razors”. And if Amazon was losing $5-6 from each $9.99 e-book, that just equates to 8 to 10 loss leader e-books’ worth of loss per unit. And Amazon isn’t permitted to take a loss on e-books anymore, so if they can get people to buy a bunch of them, after a while it’s pure profit.

Both the tablet market and the e-reader market just got a whole lot more interesting. It will be fun to see how the landscape looks in a year or so.


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