Amazon tablet will sell for "hundreds less" than iPad

Upcoming Amazon tab will massively undercut competition

Amazon's rumoured tablets will reportedly undercut others on the market by hundreds of dollars, according to anonymous sources (aren't they always?) at the New York Post, backing up similar rumours we'd heard earlier this month.

According to the Post's source, Amazon will strike out into the tablet market in September or October, with a cheaper tablet that will massively undercut the pricier competition from Apple and the Android gang.

Selling at a loss is a familiar tactic for Amazon. The Kindle reader, for example, has been estimated by market research firm iSuppli to cost around $30 less than its asking price for materials alone, meaning that after manufacturing and licensing, the Kindle may well be selling at a loss (although Amazon are cagey about commenting on that). Originally, Amazon was also rumoured to be selling ebooks at a loss, to spur sales of its new e-reader.

Underselling the hardware when your customers are a captive audience is also the strategy of the gaming console developers (Xbox 360s and PlayStation 3s are all sold at a loss, with the money made back in £50 game prices). With Amazon already a one-stop shop for books, films and apps, we can see the company taking the same route.

Specs on the Amazon tablet are still up in the air, but check out our Amazon tablet rumours feature for the pick of the gossip so far.

Link: New York Post