SAN FRANCISCO (Reuters) - Amazon.com Inc introduced on Thursday a $49.99 tablet, a price tag analysts said was low enough to set it apart in a crowded market and draw more customers to its online services.
The new Fire tablet, one of several new and upgraded devices launched by Amazon, comes with a 7-inch (17 cm) wide screen and a front and back camera. It will start shipping on Sept. 30.
"There's one part of the tablet (market) that's growing right now and....that's sub $100 tablets," said Dave Limp, senior vice president of Amazon devices, adding that the company's $99 Fire HD was its best selling tablet last year.
Analysts said there are few comparable tablets that cost as little as the new Fire. The device comes with a quad core processor and 12 gigabyte storage.
"The lesson we learned from consumer electronics is that when the market matures consumers go cheaper...If you're Amazon and you know this is going to happen you might as well join in," said James McQuivey, principal analyst at Forrester.
He called the $50 tablet a "gateway drug" for Amazon to attract new customers to Prime, a $99-a year shopping program estimated to have around 40 million global members.
The potential to draw more customers may appease investors but could prove costly if Amazon fails to sell large volumes, analysts said.
Amazon took a $170 million write down in the third quarter last year after it struggled to sell its inventory of $200 Fire smartphones. Amazon has said it does not plan to profit from devices but to drive more customers to services through the gadgets.
Amazon on Thursday also rolled out a line of new, 8-inch and 10-inch Fire HD tablets and revamped Fire TV gadgets.
The $99.99 Fire TV set-top box integrates its cloud-based virtual assistant Alexa, allowing viewers to check the weather, look up sports scores and play music.
Amazon said viewers will soon be able to control home appliances through Fire TV, a function available on Echo, the company's personal aide gadget that can control thermostats and lights.
(Reporting by Mari Saito; Editing by Miral Fahmy)