Kindle 2 Now Costs Less Than $ 200
Amazon has attracted a fair deal of criticism regarding the price of its Kindle reader and has now stated that the price of the Kindle 2 reader will drop from $ 359 to $ 299. The Kindle 2 was launched in February 2009. The Kindle DX, launched in June 2009, is unaffected and its price remains at $ 489. Amazon have stated that customers who have had their Kindles shipped to them in the thirty day period prior to the price cut announcement would benefit from a $ 60 credit based on the price difference.
This is the first ever price reduction for any of the devices in the Kindle reader series. According to Amazon, increases in production volume now permit them to pass savings on to the consumer. This explanation is being queried by many industry analysts who feel that it may be just a little early for price cuts of this type bearing in mind that the Kindle 2 was released just five months ago.
Increased competition from other ebook reader manufacturers is generally felt to have been a significant influencing factor in Amazon’s decision. In addition to Amazon, Sony, Apple and a multitude of smaller companies seem eager to secure their share of what is now widely predicted to be the future of reading.
The Taiwanese manufacturer Netronix is currently producing lowerfunctionality, reduced cost, ebook readers for companies such as Elonex and Interead. Whilst these lack the wireless connection facility of the Kindle the prices are very much lower. Perhaps even more significant than the ticket price is the rapid speed of development. The Netronix readers were brought to market in less than six months.
Amazon is clearly motivated to sell a high volume of Kindles – even if this does necessitate a price cut. The repeat ebook sales to Kindle users – a high number of whom will be heavy readers – represents a very lucrative market for Amazon. Some industry watchers have suggested that the $ 60 reduction isn’t enough for the Amazon Kindle to make the break out into iPod type status. A value below 0 has been put forward by many as being the necessary price point.
Whatever the reasoning behind Amazon’s decision to cut the price of the Kindle 2, it’s probably fair to say that Amazon know a thing or two about setting price levels. It’s been a key element of their business strategy for a number of years now.
Following the price cut announcement, Amazon shares rose by 2.3%.
