Amazon to launch 10-inch tablet to compete directly with iPad, sources say

amazon-kindle-fire-internet-browserWell this is interesting. Venerable purveyor of rumors, Digitimes, is reporting that sources have confirmed Amazon will release at minimum two new tablets in 2012, and that the tech giant and Kindle maker may launch as many as four new tablets before the end of the year. The most intriguing detail is that a 10.1-inch model, presumably sized to compete directly with Apple’s 9.7-inch iPad, is likely to be priced between $249-$299, according to the report.

Apple’s new iPad, first released two weeks ago, sold over 3 million units over its first weekend of sales, a feat we reported generated over $1.5 billion for the company. Friday of last week the iPad went on sale in 24 more countries.

By comparison, Amazon’s Kindle Fire tablet — largely seen as the most able competitor to Apple’s current tablet hegemony, has sold between 3 and 6 million units since its holiday 2011 release, due to its relatively low price and close integration with Amazon’s own budding media ecosystem. Precise sales figures have not been made public.

But moving as many as 6 million tablets is no small accomplishment, particularly for a first effort. The Fire’s success has owed in large part to its price — a price that is less than half of the cheapest iPad, and undercuts most of its Android competitors. To achieve its low prices, Amazon reportedly sells the Fire at a loss: According to industry analysts IHS, Amazon pays $201.70 to manufacture each tablet, which sell for $199 — a loss of $2.70. Although Amazon’s outspoken CEO Jeff Bezos told The Associated Press, “We want the hardware device to be profitable and the content to be profitable. We really don’t want to subsidize one with the other,” it is clear from further rumored aggressive pricing that what Amazon is looking for right now is widespread adoption, buttressed perhaps by its lucrative content integration.

Because the Fire’s display accounts for an outsized 46 percent of the tablet’s cost, Amazon is allegedly turning to HannsTouch as the new supplier of touchscreens.

Digitimes also speculates that a new 7-inch tablet model, priced at $199, will be replacing the current Fire, and that yet another 7-inch model — this one aimed at entry-level consumers — may be available for as little as $169. With the expanded lineup, the report states that Amazon may see its tablet shipments “reach 20 million units in 2012,” an optimistic but entirely feasible prediction, given past sales.  A recently released firmware upgrade for the current Fire, which added in-book sharing and document storage, could be the precursor to an updated OS to go along with the new models. Shipments of the 10.1-inch tablet may begin as early as July.