Tablet Wars Heat Up As Amazon Cuts Kindle's Price

Amazon is cutting the price of its large-screen version of the Kindle in a bid to hang on to market share in the booming tablet market.

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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, led 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 that 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 may 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.

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