There has been an observable trend of declining Kindle prices ever since the first incarnation of Amazon’s popular eReader in 2007. It has actually been surprisingly steady and at one point led to rumors that there will be a free Kindle arriving in 2011 or 2012. I’m not going to say that there won’t be a free Kindle at some point. There very well might, especially if Amazon finds enough advertisers willing to buy into their Kindle w/ Special Offers scheme. For now, however, I think that the more realistic hope would be a version of the same priced at, or simply a price cut to, less than $100.
For many people, this number has become emblematic. It is the point at which eReaders become “worth it”, for whatever reason. Even with the release of the recent ad-supported Kindle at just $115, people have still been expressing disappointment and outrage over that last fifteen dollars. Now, we have to assume that Amazon is aware of this. I don’t know how large a group of people it represents, but it is definitely a vocal one. I can see two major reasons why they might have chosen, up until now, to avoid giving in to these pressures.
The most obvious is simply production costs. Many reports have estimated that Amazon is almost certainly selling the Kindle at or below the cost of manufacture. If this is the case, then even with Kindle book sales on the rise I could definitely understand a certain hesitation on the part of Amazon to accept a loss of fifteen dollars per unit on millions of units per year. Not only would I call this scenario likely, I would say that the release of a Kindle supported by advertising is evidence of Amazon’s need to find creative ways to bring costs down. As the trend catches on and advertisers buy into the idea, it should be possible for prices to drop even more.
The other explanation, which is not exclusive of the first by any means, is that Amazon wanted to catch people’s attention with a price drop early in the year but still have something in reserve for the holiday season. Let’s face it, the time to be launching an ad campaign highlighting your newly affordable piece of portable electronics is right before the holiday season. By holding off for a bit, it gives them room to time the all important move into impulse buy pricing.
There have been chances to grab eReaders for less than $100 before, including refurbished Kindles and Nooks that I’ve seen for as low as $80, but this would be the first regularly available, new, full featured, current generation eReader to hit that level as far as I know. We can be sure that the Nook will follow suit as soon as B&N figures out how to afford it, but this would be an even bigger advantage for the Kindle than it has at present. It would also do a great deal to set the product apart even further from any Tablet PC offerings that Amazon may or may not be releasing this year, which seems vital if they are following through with the plan to continue offering a dedicated eReader indefinitely.