Amazon May Slash Down Kindle Fire Tablet Price to $169 on Release of Kindle 2

The battle in the 7 Inch tablet market is at the moment among the hottest in the gadgets and mobile device world – thanks to the recently released Nexus 7 tablet by Google and the rumors of the soon to come iPad mini.  As we reported a few days ago here about how the Nexus 7 release completely destabilized the Kindle Fire, today we may have some good – or bad – news concerning Kindle Fire.  Amazon, the one of the dominant names in the mini-tablet market segment, is expected to release a successor to its Kindle Fire Tablet later this year as we reported here.

DealNews is suggesting that instead of completely phasing out the current Kindle Fire tablet, Amazon could continue offering it albeit at a drastically slashed price.  Rumor has it that Kindle Fire 2 is set to compete with the highly favored and the currently dominant Nexus 7 tablet which retails at a price of $199.  DealNews predicts that the current Kindle Fire may be priced at $169 – a lower-tire option to attract buyers who hold pricing at a higher regard.  The discount information site goes on to say that Amazon has in the past slashed the prices of e-book readers by between 10 and 61 percent upon releasing new improved ones in the market.

The margins of the Kindle Fire tablet are however slimmer compared to those of the e-book readers.  A 7-inch tablet could have cost between $150 and $201 to produce when the device was launched – and this is a price exclusive of development, shipping and costs of marketing.  For Amazon to sell the Kindle Fire at a price of $169, it will have to negotiate better deals with suppliers of components and keep the cost of producing one tablet below $150 – we cannot tell if this is practical though.

If Amazon goes through with the price slash rumor, the mini-tablet market could be split 3 ways:  The original Kindle fire will take the sub-$200 budget segment, the Kindle Fire 2 and other entry-level tablets such as Nexus 7 will share the $200 price segment and the iPad mini and other tablets to be released soon such as Samsung Galaxy mini will share the $250+ price point.

Would saving $30 sway you to Kindle Fire over Kindle Fire 2 to be released soon?

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