OPTION ONE! Price it at $400 and hope that people bite.
This is dangerous, but you can do it and still turn a profit because you don’t have to deal with middlemen like other tablets do. Like Apple, you control your own retail sales channel, which cuts out a lot of superfluous fluff.
You can run this thing lean and mean. The problem—or CONUNDRUM!—with this plan is that you risk your tablet getting lost in a sea of other low-priced Android tablets. The nonundrum (new word!) is that you won’t risk cannibalizing sales of the Kindle. So there’s that.
OPTION TWO! Price it as a loss-leader and make money with content.
I like this idea and I *think* it may be the most realistic route for you.
You could price the tablet at, say, $300 and hope to sell enough apps, movies, music, books and retail products to turn a profit on the back-end. Video game consoles do this all the time. And at $300, it’d be priced lower than any other serious Android tablet but high enough that people would still buy your $140 Kindle if they just wanted an e-book reader.
I hope I don’t have to tell you that if you price this thing at $500 or more, you’re screwed. See: Android tablets that have fallen on their faces.
So there’s two realistic options for you, and this—the most radical of them all.
OPTION THREE! Subsidize it (but NOT with a wireless carrier).
How can you sell your tablet for far less than it’s worth without hamstringing it with an unnecessary two-year wireless data contact—a mind-numbingly backwards tactic that tablet makers are still trying to get away with?
Subsidize it with a content contract. Hear me out!
You sell stuff—lots of different stuff. Much of which people actually find to be valuable, unlike a wireless data connection they’ll never use. Let’s say you sell this tablet for $200 (hear me out!) if people agree to spend $10 per month for an entire year at your site?
That’s one e-book, which could draw in e-book lovers. That’s one music album, which could draw in music lovers. That’s one movie, which could draw in movie lovers. It’d ensure you some residual income while exposing people to your fancy new streaming media services. Win? Win!
But what about the conundrumation (new word!) that such a strategy would bring upon your poor Kindle? Easy. Offer the same deal for a free Kindle. You want to sell books, right? If people offer to buy one $10 e-book per month for an entire year, give ’em a free Kindle.
That’s what Audible.com used to do way back when it first started. The site gave away free or deeply discounted MP3 players to people who agreed to get locked into monthly audiobook subscriptions.
Ideally, you’d use options two and three for your tablet: Sell it for $300 straight up or subsidize it with a content contract. Whatever you do, don’t price it at anything over $400 and don’t entertain the idea of getting a wireless carrier involved unless they’ll play by your rules.