New Chip Could Drive Kindle Price to Under $200

Freescale Semiconductor, whose processors are used in Amazon’s Kindle and Sony’s readers, is ready to release a new chip that will help drive down the cost of readers, perhaps to as little as $150. The Austin, Texas based company says the chip could be ready in as little as six months.

Although sales of readers are expected to double this year, from the 4 million sold in 2009, that is still a mere fraction of the book-buying market. A lower-priced reader is one way to tap a larger chunk of the market. The ticket price of readers has been a barrier to wider consumer distribution.

According to Freescale officials, the new chip eliminates features that aren’t used in e readers while adding the ability to better control the unique E ink display technology. Currently the displays are controlled by separate chips. Freescale’s faster processor is controlled by a single chip, and will reduce page turning time from two seconds to less than a half second.

Apple’s iPad, set for release later this month, uses the company’s own chip and will not benefit from Freescale’s improved technology. With price tag as high as $699, news of price cutting by its competitors couldn’t come at a worse time. Price conscious consumers, already suffering from sticker shock on the iPad, may wait for lower priced Sony or Amazon readers. And the six-month release hits just in time for Christmas gift giving.