Amazon dumps on report claiming $99 Kindle Fire on the horizon

Report claims that a 7-inch Kindle Fire with a $99 price tag is in production and will ship later this year. Amazon says it's hogwash.

Amazon's Kindle Fire HD.
Amazon's Kindle Fire HD. Josh Miller/CNET

Could Amazon offer a high-definition Kindle Fire tablet as cheap as $99? That's the latest rumor coming from the folks at TechCrunch.

Citing no specific sources, TechCrunch said it's "now hearing" that a $99 7-inch Kindle Fire is on the production line, with plans to ship sometime this year. Reportedly, the new device would use a TI chip and offer a 1280x800-pixel resolution, just like the current Kindle HD 7-inch tablet.

Amazon recently trimmed the prices on its Kindle Fire HD 8.9-inch tablets . TechCrunch pointed to price drops as a way of either selling more units at a quicker pace or clearing out inventory in anticipation of a new model.

It's not clear how a price drop on the 8.9-inch Kindle Fire would be a sign of a new and cheaper 7-inch Kindle Fire, though industry experts told TechCrunch that the 7-inch HD Kindle Fire is Amazon's most popular model.

Conceding that a $99 Kindle Fire would be "extraordinary," TechCrunch also cited comments from IDC analyst Tom Mainelli, who said that such a low-priced tablet "sounds reasonable." But just how reasonable is it?

Currently, the Kindle Fire HD sells for $199, while its non-HD predecessor sells for $159. If TechCrunch is on the money here, that means Amazon would be cutting the price of a high-definition, 7-inch Kindle in half.

Amazon does use its Kindle hardware as a gateway to sell content. As such, the company is more than willing to sell its Kindles at a loss in return for generating more customers to buy music, videos, apps, books, clothing, and other items from the site.

Amazon already loses money on each sale of the $199 Kindle Fire . Could it afford to sell a $99 version with the same features, even if customers bought it in droves?

And if the current Kindle Fire HD truly is Amazon's most popular model, would the company undercut it by launching a lower-priced version with the same specs? A $99 Kindle tablet is certainly feasible. But it's unlikely to sport the same beefy specs as the $199 Kindle Fire HD.

Amazon has refuted claims of a $99 Kindle Fire, telling TechCrunch that the current Kindle Fire HD is already at its lowest price point.

A spokesman for the retailer echoed that comment to CNET, saying that a $99 HD Kindle Fire is "not happening -- we are already at the lowest price points possible for that hardware."

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