Amazon on Thursday launched a series of new, more expensive Alexa tablets and announced it was discontinuing its budget Fire line, marking a significant shift in the e-commerce giant’s device strategy.
The company revealed 8-inch, 11-inch and 12-inch models, which start at $230 and go up to $550. All devices are available for pre-order on Thursday and will begin shipping on October 14.
Amazon has historically sold its devices at or near manufacturing price, partly to compete with competitors with extremely low prices, but also in an effort to promote its other products and services. It’s hoped that for every $80 Echo smart speaker sold, users will buy movies, audiobook subscriptions or items on its extensive online store, which tend to have higher margins.
The company has recently taken steps to make more money from its devices business under CEO Andy Jassy, who succeeded founder Jeff Bezos in 2021. Last year, it introduced more expensive versions of its Echo smart speakers and began charging non-Prime members for a subscription to Alexa+, the upgraded version of its digital assistant.
The $550 Alexa 12 Pro tablet is more than double the price of the $155 Fire HD 10, Amazon’s base model, and brings it more in line with AppleThe iPad, which costs between $449 and $1,199.
The launch comes as Amazon and other device makers grapple with a historic rise in memory prices. In August, Amazon raised prices on Echos, Kindles, Fire TVs and other hardware, citing lack of memory. And earlier this year, Apple raised prices on MacBooks and iPads, while Nintendo increased the price of its Switch 2 console.
Amazon is renewing its range of tablets with three Alexa brand models.
Courtesy: Amazon
Amazon has denied that rising memory costs played a role in its decision to charge more for the Alexa tablet. But Panos Panay, the company’s devices boss, acknowledged that the shortage made it “quite difficult” to build a high-end tablet at a reasonable price without making “compromises.”
“I think the team did a good job designing without making that swap,” Panay told CNBC in an interview. “They’ve given you all the know-how of a product, but are able to keep it at that price point.”
The company said the Alexa Tablet’s improved speed and performance, artificial intelligence features and improved design justify a higher price and put the devices on par with “the best tablets on the market.”
Amazon added a sleeker, sturdier aluminum stand, a higher-resolution screen, and faster processors. On the Alexa Tablet 12 Pro, the most high-end model, it integrates “Nanoatte” display technology developed in partnership with Corning to “significantly reduce screen glare”.
One of the most notable improvements is that all devices work Google‘s Android operating system, a major change from previous models, which relied on a custom Android version dubbed Fire OS and used Amazon’s own app store, limiting the number of apps available.
It’s also the first time Amazon has branded a set of devices with Alexa, the company’s automated assistant first launched in 2014 via the Echo smart speaker. Alexa is front and center in the new tablets, via a “dynamic tab” on the home screen that offers recommendations and allows users to quickly pick up where they left off while reading or watching a TV show. Users can say “Alexa” or tap the “Ask Alexa” button to ask questions.
The company also introduced a new feature called “On-Screen Intelligence,” where users can ask Alexa to look at what’s on their screen and make suggestions or take actions.
In a demo, Panay showed how users could watch a TikTok clip of someone cooking on a grill and ask Alexa to purchase a burger press used in the video. Users can also view a gaming schedule and add each date to their calendar, Amazon said.
“She’ll do her homework, and if all goes well, she’ll pull up a shopping list that I can just click buy now,” Panos said.
Amazon said it will continue to support the Fire line for four years after final shipping and consumers will be able to continue using their devices as they do today, but it will no longer make new units. The Fire line includes a 10-inch and 8-inch model, as well as two versions aimed at children.
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