Amazon is planning to release $50 tablet by the holiday season, in a bid to attract more cost-conscious shoppers.
The device would likely have a six-inch screen and be about half the price of Amazon's Fire HD 6-inch tablet, according to The Wall Street Journal, which first reported the story.
But by cutting the price, the company risks disappointing consumers with a product that won't have all the bells and whistles of competitors like Apple's iPad. It could, for example, compromise on battery life, screen resolution or audio quality.
The $50 device will be unveiled alongside several other new devices, including tablets with 8-inch and 10-inch screens, the Journal reported.
An Amazon spokesperson said the company, as a matter of policy, doesn't "comment on rumors and speculation."
Amazon CEO Jeff Bezos appears willing to almost give away the cheaper hardware in the hope that customers would then become long-term buyers of digital content like streaming video or e-books.
The move comes at a challenging time for the company, which just last month reportedly scaled back its Fire smartphone efforts and downgraded or put on hold several projects including a large-scale tablet.
The Fire Phone received negative reviews shortly after its introduction, with users complaining about the device's ho-hum features and $650 non-contract price tag. As of last October, estimates were that Amazon had sold only about 35,000 units, a sliver compared to more popular smartphones. Amazon took a $170 million write-off on the Fire.