Amazon is reportedly set to unveil a new version of its Kindle Fire tablet by August. A hurry-up launch could spike interest in its flagging Fire product but would also come at a time when a growing number of discount tablets are crowding the market.
The latest report of the rumored Kindle Fire 2 comes via Wired who spotted a Chinese news report that suggests Amazon (s amzn) is rushing it into production. The new device is expected to improve upon the existing model which has been criticized as sluggish and inelegant.
From a strategic perspective, the tablet landscape has already shifted considerably from last fall when Amazon caused a stir by unveiling the Kindle Fire as a $199 challenger to Apple’s still-dominant iPad (s aapl). Now, the lower-end tablet market is up for grabs not just from devices like the Galaxy Tab, the Nook Tablet (s bks) and Google’s Nexus 7 (s goog) but also by Apple itself, which is reportedly planning a smaller iPad for later this year.
By launching a souped-up Kindle Fire 2, Amazon appears to be doubling down on its strategy of selling tablets at a loss in order to lure more customers into its shopping web. Earlier reports say the Fire 2 will also be priced at $200.
The launch of a next generation Kindle also raises the question of what will become of the original Fire that has been on the market for barely half a year. As Laura Owen reported in May, Amazon has reportedly been preparing to sell buckets of ads on the Fire. This could mean that the company will begin offering an ad-supported version of the older device for a bargain basement price when the new Kindle Fire 2 debuts.