Amazon on Thursday unveiled a set of new, more expensive Alexa tablets and said it will ditch its budget-friendly Fire line, marking a significant shift in the e-commerce giant’s device strategy. The company introduced 8-, 11- 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 cost, partly to undercut competitors with extremely cheap prices, but also to promote its other products and services. For every $80 Echo smart speaker it sells, users are expected to buy movies, audiobook subscriptions or items on its extensive web store, which tends 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 Tablet 12 Pro is more than double the price of the $155 Fire HD 10, Amazon’s base model, putting it more in line with Apple’s iPad, which ranges from $449 to $1,199. The launch comes as Amazon and other device makers are grappling with a historic spike in memory prices. In August, Amazon raised prices on Echos, Kindles, Fire TV and other hardware, citing memory shortages. And earlier this year, Apple raised the prices of its MacBooks and iPads, while Nintendo raised the price of its Switch 2 console. Amazon is revamping its tablet lineup with three Alexa-branded models. Courtesy: AmazonAmazon denied that rising memory costs influenced its decision to charge more for the Alexa tablet. But Panos Panay, the company’s device chief, acknowledged that the shortage made it “quite complicated” to build a premium tablet at a reasonable price without making “compromises.” “I think the team did a good job designing without making that trade-off,” Panay told CNBC in an interview. “They gave you the full craftsmanship of a product, but they can keep it at that price.” The company said the Alexa tablet’s improved speed and performance, AI features and improved design warrant a higher price and put the devices on par with “the best tablets on the market.” Amazon added a sleeker, stronger aluminum back, a higher-resolution display, and faster processors. In the Alexa Tablet 12 Pro, the highest-end model, it incorporated “Nanomatte” display technology that was developed in partnership with Corning to “dramatically reduce screen brightness.” One of the most notable improvements is that all devices run Google’s Android operating system, a major difference from previous models, which relied on a customized version of Android called Fire OS and used Amazon’s own app store, limiting the number of apps available. It’s also the first time Amazon has attached a set of devices to the Alexa brand, the company’s automated assistant first launched in 2014 via the Echo smart speaker. Alexa is front and center on the new tablets, through a “dynamic tab” on the home screen that offers recommendations and allows users to quickly pick up where they left off by 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 “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 open a game calendar and add each date to their calendar, Amazon said. “She’ll do the homework and, if things work, she’ll show a shopping list where I can hit buy now,” Panos said. Amazon said it will continue to support the Fire line for four years after final shipment and that consumers will be able to continue using its devices as they do today, but it will no longer manufacture new units. The Fire line includes a 10-inch and 8-inch model, as well as two versions aimed at children.
