Amazon Unveils Dirt Cheap Kindles, Will Recoup Money Selling Music, Movies, Books

The new Kindle Fire tablet sells for $199, 146 Euro, the cheapest viable Android tablet

Amazon is holding a live event presenting its new Kindle line. While most people were expecting the company to reveal it's 'not so secret' Kindle tablet, the company actually launched a full update on its entire Kindle line.

There are a couple of new Kindles with touchscreens, a given since there's been a Nook with touch capabilities for a while now. While the devices themselves are quite interesting, though nothing revolutionary, the most interesting part is the pricing.

The regular, WiFi Kindle Touch will sell for $99, 73 Euro, the 3G version for $149, 109 Euro, the best prices for any Kindle to date. And there's an even cheaper one, with no touchscreen, which will sell for $79, 58 Euro. Note though that all the prices are for devices with "special offers," i.e. ads. If you want a clean one you'll pay $30, 22 Euro, more for the base model and $40, 29 Euro, more for the touch ones.

Amazon also unveiled its first Kindle tablet, the Kindle Fire. By now, the most interesting details have been leaked. Again, the only truly surprising thing is the price, the Kindle Fire, a 7-inch Android tablet, will sell for $199, 146 Euro, the best price for any decent tablet to date.

At this price points, Amazon is going to sell millions of Kindles and millions of tablets.

But if Amazon can build these devices and sell them at these prices, even though it's an online retailer and not a hardware maker, why can't others?

The answer is simple, Amazon is losing money on each device, but it's recouping it from all of the content it's going to sell. This year, Amazon sold more Kindle ebooks than actual books at its site.

You can bet that the tablet, which also includes a 30-day subscription to Amazon Prime, is going to sell a lot of music, movies and TV shows as well. And Amazon is going to make money on each.

What's more, once people get hooked, they'll pony up for the $79 a month Amazon Prime subscription, which comes with free 2-day shipping, but also access to Amazon's 11,000 video titles it has on offer for streaming.

Amazon is adopting a strategy somewhat similar to Google's with Android, but whereas Google is giving away Android for free so it can make money from advertising, Amazon is giving the devices away at discount prices so it can sell more music, books and movies.

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