Will Amazon’s Tablet Be Cheap or Fancy? Rumors Conflict

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In another sign that Amazon is cutting corners on its rumored tablet to make it as cheap as possible, a new report suggests that the device’s screen will be less capable than those of its rivals. Or not.

Whereas the touch screen on Apple’s iPad supports input from up to 10 fingers at a time, Amazon’s tablet will use a cheaper touch screen that supports only two fingers, DigiTimes reports. However, another rumor from the same publication says Amazon is getting its touch screens from Wintek, the same supplier that provides screens for Apple, and has in fact contributed to Wintek booking up its entire production capacity along with the iPad 2 and iPhone 4.

(LIST: Tablets: ‘Why Should Somebody Buy This Instead of an iPad?’)

Setting aside these conflicting rumors for a moment, there are reports that Amazon is making other concessions to reduce the cost of its tablet. The New York Times has reported that Amazon will limit the device’s memory capacity and forgo built-in cameras. Earlier reports suggested that Amazon will use a quad-core processor in at least one of its tablets, but that seems less likely if the company really wants to cut costs.

Meanwhile, some pundits — including my colleague Doug Aamoth —  think Amazon should further reduce costs by selling the tablet at a loss while hoping to make the money back on sales of music, movies, e-books and apps. Amazon will have a more complete content ecosystem than any other Android tablet, so this theory is plausible. We’ve also heard a rumor that Amazon will include a limited-time offer of free streaming video with the tablet. (Doug also thinks Amazon could sell its tablets with content subsidies, so a customer would agree to buy a certain amount of Amazon stuff every month in exchange for a cheaper tablet.)

All of this indicates that Amazon is pushing for low prices rather than state-of-the-art hardware. With that in mind, a two-finger touch screen wouldn’t be a big surprise, nor would it be a major concession for uses like reading, watching movies or listening to music. If Amazon can crack the $300 barrier with this tablet, those cost-cutting measures will seem justified in the end.

MORE: Dear Amazon, Here’s How You Should Sell Your Tablet