Amazon's flagship tablet - the Kindle Fire - might get even cheaper, if reports the company is considering slashing the price of the gadget are true. It seems the company could do so, given they intend to launch a new range of e-book readers and 7-inch tablet PC products at the beginning of the third quarter.

According to a DigiTimes report, the world's biggest online retailer is working on expanding its market share and sources from the upstream supply chain have indicated Amazon is following its biggest rival's (Apple Inc.) business model of introducing a new device and simultaneously promoting sales of older products by offering them at cheaper prices. The move is designed to tap lower segments of the market. 

The anonymous source has claimed that Amazon's new 7-inch tablet PC will sport a screen resolution of 1280X800 pixels and will come with a price tag of US$199, meaning it will target the higher end of the markets.

The new e-reader will, however, target the entry-level segment and sport similar features as the original Kindle Fire - a screen resolution of 1024x600 and a price of US$149.

The Kindle Fire has proven to be a hugely successful product for the company. Amazon sold between 4.5 and 5 million units in the fourth quarter of 2011. The success of the Fire, however, was short-lived as it was meant only for the US market. According to recent report, sales of the Fire tapered off to only 700,000 - 800,000 units in the first quarter of 2012.

Amazon is reportedly also working on 8.9-inch and 10.1-inch models and will release them either in the fourth quarter of 2012 or the first quarter of 2013.

Finally, the company is developing a 6-inch backlight-unit-module-integrated e-book reader that is set to be launched in the third quarter at the earliest, according to the sources.