$99 Kindle Fire HD Could Decimate Amazon.com, Inc. (AMZN)’s Competitors

After failing with webOS, HP needs to establish itself in the tablet market. With PC sales declining, a strong tablet strategy is necessary to keep HP relevant. But if Amazon.com, Inc. (NASDAQ:AMZN) keeps cutting prices, HP’s apparent strategy — of appealing to the low-end of the market — will be futile. As HP is not in the market of offering digital goods, it won’t be able to subsidize its hardware costs with media sales.

In its review of the Slate 7, engadget writes that “Android lags slightly on that dual-core CPU, but we wouldn’t say it’s any worse than what you’ll experience on other budget tablets.”

It’s clear then that the Slate 7 appears to be made with the budget-conscious in mind. Would a $99 Kindle Fire prompt HP to rethink its strategy?

Game over for Barnes & Noble, Inc. (NYSE:BKS)’s Nook?

Beyond pressuring low-end Android tablets, a cheaper Kindle Fire could prove to be a knockout punch for Barnes & Noble, Inc. (NYSE:BKS)’s Nook division.

When the bookseller reported earnings in February, the company posted a loss and cited slowing demand for its e-books and e-readers. In the earnings call, Barnes & Noble’s CEO stated that “physical book sales will have a longer [life expectancy] than previously anticipated.”

Or perhaps, Barnes & Noble’s Nook division is being bested by Amazon. Localytics reported in January that when it comes to Android tablets, the Kindle Fire dominates. About one-third of Android tablets are Kindle Fires, while only one-tenth are Nooks.

With Amazon’s Kindle lineup handily beating Barnes & Noble’s Nook, a cheaper Kindle Fire could relegate the Nook to irrelevancy once and for all.

Amazon looks committed to its strategy for the long-haul

If Amazon.com, Inc. (NASDAQ:AMZN) does roll out a cheaper Kindle Fire, it will show that the company is fully committed to its cheap tablet strategy. Other tech companies, like HP, lack the media business to offset the lost profits, so Amazon’s continued domination of the low-end tablet market seems assured.

Barnes & Noble has the media business to support its Nook, but the device seems to be floundering compared to Amazon’s Kindle.

If Amazon continues to pursue such a strategy, its competitors are going to have to find ways other than price to compete.

The article $99 Kindle Fire HD Could Decimate Amazon’s Competitors originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

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