Amazon.com plans to start selling its tablet based on Google Android’s Honeycomb technology just in time for the holiday season.
Amazon could sell its upcoming tablet for less than it costs to make but still take home a profit in the long run, according to tech industry analyst Tim_Bajarin.
Discussing Amazon’s expected tablet in a column for PC Magazine last week, Bajarin derived an estimated cost for the device of $300 based on information from various sources. Assuming Amazon then discounts the retail price, consumers could pay as little as $249, projects the analyst.
Though the retailer would take a loss on the initial sales of the tablet itself, the company would more than make up the gap by selling a certain number of videos, songs, books, cloud storage, and other type of content to a typical buyer.
“By my guesstimates, Amazon would make back that lost $51 within six months and reap a profit of anywhere from 10 to 30 percent on the tablet over the last 18 months of the device’s accounting period,” wrote Bajarin.
Forrester analyst Sarah Rotman Epps also agrees with this as recently said that while she believes the e-tail giant could find success with a tablet, the company would have to price it under $300 and make sure that it has enough devices to meet consumer demand.
Whatever Amazon ends up selling the Kindle Tablet for, we cant wait to take a look at it.