It was reported late last week that Asus would be partnering with Google to release a sub-$100 tablet to compete against Amazon’s Kindle Fire, which is priced at $160, but Asus has since refuted those rumors to DigiTimes. When Amazon had debuted the Kindle Fire last year, the company had made strong in-roads in the tablet space and the 7-inch market with the $200 price point and a $99 price point by Asus would have depressed tablet prices further.
It was also rumored that Asus would be releasing an updated ultra-thin version of the Nexus 7 tablet with a slimmer design at the same $199 price point that the original Nexus 7 was released at. However, that appears to be untrue as Asus has also denied those rumors.
$200 appears to be the popular price point for tablets with consumers in the 7-inch space, and Amazon, rather than Asus, may have more room to lower its prices as it can sell the tablet hardware at a loss and recuperate loss revenues on hardware by selling software. Amazon views the tablet market as a new window into its digital storefronts where customers can sign on to Prime membership, purchase digital music, acquire digital books and magazines, watch digital TV shows and movies, and even shop Amazon.com. Amazon also has a rival Amazon Appstore for Android that rivals Google’s Play Store and the company does earn a percentage of sales for each title sold. Asus, on the other hand, just manufactures the hardware and Google then would generate revenue on digital sales of content. It’s unclear if Asus and Google has a revenue sharing agreement in process, but if the two company don’t have any agreements than Asus may not be able to lower prices of its slates further and still generate profits.
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