5:26am

Thu March 14, 2013
Business

Tablet Wars Heat Up As Amazon Cuts Kindle's Price

Originally published on Thu March 14, 2013 9:34 am

Transcript

STEVE INSKEEP, HOST:

Now to those things that look like blown up versions of smartphones - tablets. Amazon has just slashed the price on two of its devices.

NPR's Wendy Kaufman reports.

WENDY KAUFMAN, BYLINE: Amazon cut the price of its Wi-Fi only, large screen Kindle Fire HD to $269 and slashed the price of its 4G wireless version to $399 - substantially less than Apple's iPad.

Apple still leads the tablet market, but Technology research firm IDC predicts that Android devices lead by Samsung, will overtake iPads later this year.

As for Amazon, its market share is shrinking. And analyst James McQuivey of Forrester Research suggests that to drive more sales, Amazon had to lower its price.

JAMES MCQUIVEY: They can't be happy to drop the price, but we can be assured they are looking at the numbers. They know if they can get you to buy the device, how much it results in increased spending either in media content or purchases on Amazon.

KAUFMAN: McQuivey says, Amazon probably thought it could break even on the devices, but now we have to view them as a loss leader - a product designed to drive profits in other parts of the company's business. The company, of course didn't explain it that way. Amazon cited lower production costs.

Wendy Kaufman, NPR News. Transcript provided by NPR, Copyright NPR.