09/18/2014 03:27 pm ET Updated Dec 06, 2017

Tablets Aren't Special Anymore


Five years ago, Apple released its first iPad at a price of $500. Now, you can buy a solid tablet for less than many people spend on cable and Internet each month.

Amazon on Wednesday unveiled a new lineup of durable tablets, dubbed the Fire HD, that start at only $99. If you spend $50 more for the Fire HD Kids Edition -- which is pretty much the same as the Fire HD, but comes with kid-specific software, parental controls and a soft but beefy bumper case -- Amazon will give you a two-year replacement guarantee. That means that if you crack the screen, plop the device in the tub (please don't use a tablet in the tub), or drop it and send its innards flying everywhere, Amazon will replace the tablet "no questions asked." Yes, Amazon will give you a free HD tablet if you break yours.

Decent tablets have gotten really cheap. According to IDC, the technology research firm, the average tablet cost in the U.S. decreased from $476 in the first quarter of 2012 to $378 in the first quarter of this year. Instead of buying high-end tablets like the iPad, people are going for less expensive models because they're good enough.

amazon kindle fire hd

Amazon's cheap tablets are not by any means equal to the more premium options out there, and they're not par with the $379 high-end tablet Amazon also announced on Wednesday. But if you just want to read, browse the web, watch Netflix or download movies from Amazon, or need a tablet that kids can throw around, then you'd probably be happy with a Fire HD.

The company's strategy is to sell its hardware at or near cost, and make money when you buy books, movies, music, TV shows or other things from Amazon.

Amazon's new, cheap tablets come as the market for tablets is slowing down. According to IDC, tablet shipments are expected to grow 19.4 percent this year, down from an explosive 51.6 percent growth rate in 2013. As an increasing number of quality, cheap alternatives have become available, iPad sales have dropped off a cliff -- down 9 percent last quarter and 16 percent in the previous quarter, compared year-over-year. After an initial frenzy, people are upgrading their tablets less frequently, and when they do buy new tablets, they're increasingly buying on the cheaper side.