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Amazon may compete with Apple iPad by giving away free Kindles

post #1 of 93
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As Amazon's e-book business continues to evolve in the wake of the Apple iPad announcement, a new rumor suggests the company is exploring the possibility of giving a Kindle reader to its best customers.

Michael Arrington of TechCrunch reported Friday that Amazon is considering a promotion that would give a free Kindle to subscribers of its Amazon Prime service. At a cost of $79 per year, Prime offers free two-day shipping on selected items, and one-day shipping for just $3.99.

"These are Amazon's very best customers -- the ones who tend to make multiple purchases per month," Arrington wrote. "And they are also likely to buy multiple books per month on their Kindle devices. If those users buy enough books, and Amazon gets the production costs of the Kindle down enough, Amazon can get Kindles into millions of peoples hands without losing their shirt."

Citing a "reliable source," he said Amazon's goal is to find a way to put a Kindle in the hands of Prime subscribers without losing money on the deal. The company ran a promotion in January where they asked users to try the Kindle, and those who were not satisfied were given a full refund, but got to keep the hardware.

The moves are just another example of Amazon rethinking its Kindle platform following Apple's iPad announcement. The company recently purchased touch-screen maker Touchco, which it plans to incorporate into the Kindle's hardware division for a future version of the device.

Amazon has said it has sold millions of Kindles, but has not given an exact number. Still, the e-book market has proved to be of value to the online retailer: The company revealed last month that it sells six Kindle e-books for every 10 physical books.

The Kindle and large-screen Kindle DX are available in over 100 countries, and the Kindle iPhone application is available in Apple's App Store in over 60 countries. E-books can be synced between the Kindle reader, PC software, and Apple's iPhone and iPod touch. Kindle software is also forthcoming for the Mac and iPad.

But Apple hopes to counter Amazon with its recently announced iPad. At the product's unveiling, Apple co-founder Steve Jobs credited Amazon with pioneering the e-book market with the Kindle, but he said Apple intends to improve on that model. "We're going to stand on their shoulders and go a bit further," he said.

With a 9.7-inch screen and a starting price of $499, the iPad offers a vibrant, color screen suited for a variety of multimedia consumption, while Amazon's e-ink, black-and-white Kindle is best suited for reading books.

Apple will serve books for the iPad through its iBookstore, due to be a part of the iBooks application for iPad. The software features a 3D virtual bookshelf displaying a user's personal collection, and allows the purchase of new content from major publishers. Like the Kindle, it will offer content from the New York Times Bestsellers list.

The introduction of the iPad has driven publishers to force Amazon into higher prices for new hardcover bestsellers. While books are currently priced at $9.99 on the Kindle, that is expected to rise to between $12.99 and $14.99 by the time the iPad launches in March.
post #2 of 93
Desperation perhaps?
post #3 of 93
Hmmm... give away the product for free... I guess that's one way to compete. Competitors to the iPhone have been doing it for a while with various BOGO schemes. Funny thing is it doesn't seem to be working.
Apple has no competition. Every commercial product which competes directly with an Apple product gives the distinct impression that, Where it is original, it is not good, and where it is good, it...
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Apple has no competition. Every commercial product which competes directly with an Apple product gives the distinct impression that, Where it is original, it is not good, and where it is good, it...
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post #4 of 93
Quote:
Originally Posted by ghostface147 View Post

Desperation perhaps?

If they gave me a Kindle I might buy more books, but I'm not going to buy books to get a Kindle.

But it doesn't matter, I'm getting an iPad.
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post #5 of 93
"Competing" isn't giving away free Kindles. Competing is offering a superior product for the price.

Amazon doesn't have the resources to develop a tablet, so if they truly want to compete with e-readers, they'll have to make Kindle even better (color?) and cheaper for everyone. They already hold the title for cheap media prices, so at least they have that going for them...

-Clive
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My Mod: G4 Cube + Atom 330 CPU + Wiimote = Ultimate HTPC!
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post #6 of 93
Amazon, just let me know where to sign-up for my free Kindle and I'll definitely be a buyer of a few e-books a month. That way both you the vendor and I the reader get to share the risk and the benefits of going down this path.
post #7 of 93
As an Amazon Prime member, I wonder if I can get a free Kindle, sell it, and subsidize the price of the iPad I fully intend to purchase?
Apple has no competition. Every commercial product which competes directly with an Apple product gives the distinct impression that, Where it is original, it is not good, and where it is good, it...
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Apple has no competition. Every commercial product which competes directly with an Apple product gives the distinct impression that, Where it is original, it is not good, and where it is good, it...
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post #8 of 93
Quote:
Originally Posted by Mac Voyer View Post

As an Amazon Prime member, I wonder if I can get a free Kindle, sell it, and subsidize the price of the iPad I fully intend to purchase?

Ditto. I should have tried that January deal...
post #9 of 93
Amazon should sell it at low margins and recoup with an increase in eBook sales.

Supporting ePub would also be a neat idea.

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post #10 of 93
That's like hoping a free scientific calculator would appeal to people more than a $99 iPod Touch. If you only care about dedicating lots of time to advanced equations and having a battery that lasts really long (plus the added benefit of solar-power) then, and only then, would the thought seem even remotely appealing.
post #11 of 93
Quote:
Originally Posted by AppleInsider View Post

As Amazon's e-book business continues to evolve in the wake of the Apple iPad announcement, a new rumor suggests the company is exploring the possibility of giving a Kindle reader to its best customers.

Apple should do something similar with their AppleTV product; or at the very least, offer it for free to people who sign up for 12 months of that rumored $30/mo iTunes subscription service.
post #12 of 93
i think someone once said price is an indicator of something...giving your product away is quite an indicator in this case (for the kindle) and not really competition, as it has been said...
post #13 of 93
Quote:
Originally Posted by Mac Voyer View Post

Hmmm... give away the product for free... I guess that's one way to compete. Competitors to the iPhone have been doing it for a while with various BOGO schemes. Funny thing is it doesn't seem to be working.

yeah. makes you wonder really

if they are so willing to give away the device then is it really a money maker for them. Perhaps they would be better off trying to position their software/service onto other devices. They did a Kindle app for the Mac and the Iphone/touch and one assumes it will work on the ipad. So they would get book sales out of that. add perhaps the gift of a free book or several based on purchase history and they could lure their shoppers into making the leap. same with tv shows and movies on demand (which I hear they are doing with some titles)

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A non tech's thoughts on Apple stuff 

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post #14 of 93
Giving them away to their already existing e-book customers ?
So that these customers then can read two at the same time ?!
post #15 of 93
Pick me! Pick me!
post #16 of 93
I sense a paradigm shift in the ebook reader market.
post #17 of 93
Get ready for a flood of Kindles on eBay.
post #18 of 93
If Amazon hasn't known all along that Apple would eventually bury the Kindle with some kind of multifunction tablet, then they're not nearly as smart as people give them credit for. Amazon has accomplished their primary goal, which was to jump-start the ebook industry. Now they have to move over, like it or not. The Kindle is hopelessly quaint compared to the iPad.
post #19 of 93
I am an Amazon Prime subscriber and don't currently own a Kindle. I welcome this news!!

I'm not gonna turn down freebies
post #20 of 93
If Amazon doesn't already have a name for this promotion, I suggest "Rekindle."

Or maybe that's too honest.
Please don't be insane.
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Please don't be insane.
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post #21 of 93
I sold two Sony Readers on eBay right before the iPad was announced. I got about what I paid for them. It looks like I picked a really good time!

As much as I don't care for the locked-down platform, the iPad will make a great ebook reader. People talk about eInk being better on the eyes--but in practice the contrast isn't that great, and it's slow. Not to mention the lack of color, or the price-premium for larger-sized devices.

I'm hoping the iPad will make some inroads into the textbook market, but we'll see.
post #22 of 93
Quote:
Originally Posted by alansky View Post

If Amazon hasn't known all along that Apple would eventually bury the Kindle with some kind of multifunction tablet, then they're not nearly as smart as people give them credit for. Amazon has accomplished their primary goal, which was to jump-start the ebook industry. Now they have to move over, like it or not. The Kindle is hopelessly quaint compared to the iPad.

It doesn't seem that way. They've been nothing reactive. I don't count acting days prior to the iPad announcement as being proactive. It was obvious a tablet was coming, plus all the tablets at CES.
Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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post #23 of 93
This is quite a clever idea by Amazon. Remember they are not competing just with the iPad; dozens of e-book readers were announced last month at CES.

Give away the Kindle and rival manufacturers (who don't have their own ebook stores to help subsidize costs) will not be able to compete. No profit to be made on hardware and companies will soon start pulling out of the dedicated e-book business. At the same time it enables Amazon to shift more Kindles which locks more people into Amazon. After a while you have invested too much into Kindle books that won't work on any other ebook reader that you won't be able to switch.

I don't think this really affects Apple as anyone truly interested in ebooks would probably be looking at dedicated ebook readers rather than the iPad. And there is still the Kindle reader for the iPhone/iPad.
post #24 of 93
Perhaps will be handy for reducing inventory of the old Kindles once the touch-screen revision comes out ... but that won't be until fall I would think.

I really don't see the advantage for Amazon if they only break even or a small loss on the unit if they just want to promote their eBooks. They will sell plenty of eBooks for use on the iPad and Kindle both. They'd be wise not to freak out. Just keep improving the bookstore. I haven't used a Kindle or even held one, but from everything I hear I would bet that some people will still prefer them as dedicated eBook readers. They should focus on that crowd for the Kindle and leave the fancy pants software to Apple and others.
post #25 of 93
Quote:
Originally Posted by extremeskater View Post

No. Apple makes its money on hardware, its sells software to promote and sell its hardware. That isn't that case with many companies. Many are willing to give away the hardware in order to sell and make money off the software. Gaming consoles are a perfect example, in many cases the hardware is sold at a loss to get you to buy games at 60.00 where the real money is made.

Correct. Amazon does not need to sell Kindles to make money selling eBooks. I think they will be satisfied to sell content to iPad owners. Hell, they might make more profit selling iPads through their store than they currently make designing, building, advertising, and selling Kindles.
post #26 of 93
By Amazon releasing a Kindle app for the iPhone they gave their customer who already bought kindle books a migration path to the iPad.

Just show you Amazon had not clue what Apple was up to.
post #27 of 93
This might actually be funny if it wasn't so sad.
post #28 of 93
Quote:
Originally Posted by Maestro64 View Post

By Amazon releasing a Kindle app for the iPhone they gave their customer who already bought kindle books a migration path to the iPad.

Just show you Amazon had not clue what Apple was up to.

Which gives Amazon a way to make money even if Apple wins the hardware battle.

Amazon was subsidizing e-book prices to kick start e-book sales. Long term Amazon will make its profits from the book sales not hardware.

Amazon does not really care if you are reading on a Kindle, an iPhone/iPad or a Mac/PC as long as you buy your ebooks from Amazon. The more e-books you buy from Amazon (in their propriety format) the more locked into Amazon you become.
post #29 of 93
Another thing to consider is that
1. They have a new model coming and by getting their best customers to start using Kindle, they might upgrade to the new unit when it's released while getting rid of their old models

2. They figure to cover the cost with the additional earns from the higher pricing of the ebooks.

A lot of Prime customers don't buy books but other items from Amazon so a free Kindle could expand their buying.
post #30 of 93
Quote:
Originally Posted by Clive At Five View Post

"Competing" isn't giving away free Kindles. Competing is offering a superior product for the price.

Amazon doesn't have the resources to develop a tablet, so if they truly want to compete with e-readers, they'll have to make Kindle even better (color?) and cheaper for everyone. They already hold the title for cheap media prices, so at least they have that going for them...

-Clive

amazon doesn't have to develop one to sell one. there are a few companies that showed off OEM tablets at CES. all you have to do is customize the software a bit and you can sell your own branded tablet or gizmo
post #31 of 93
I just hope the iPad makes Amazon lower prices on the Kindle. The DX is nearly the same price with a fraction of the functionality, surely this will pressure them to lower the price.
post #32 of 93
Quote:
Originally Posted by extremeskater View Post

No. Apple makes its money on hardware, its sells software to promote and sell its hardware. That isn't that case with many companies. Many are willing to give away the hardware in order to sell and make money off the software. Gaming consoles are a perfect example, in many cases the hardware is sold at a loss to get you to buy games at 60.00 where the real money is made.

Console makers are not making "real" money except Nintendo. Microsoft and Sony game divisions are still a long long ways away from recouping their initial investments. I also can't think of any other industry that sells hardware at a discount in order to sell software, can you? The PC industry is based on hardware sales.
post #33 of 93
If Amazon is going to go down this road of giving away physical objects for free, they should be ready to deal with any anti-trust problems that arise. This isn't software with zero marginal cost to handing it out to people for free; it costs money to make an object, and selling them for less than the cost to make them (or giving them away) to stave off competition is usually againt the law.
post #34 of 93
Quote:
Originally Posted by clickmyface View Post

Console makers are not making "real" money except Nintendo. Microsoft and Sony game divisions are still a long long ways away from recouping their initial investments. I also can't think of any other industry that sells hardware at a discount in order to sell software, can you? The PC industry is based on hardware sales.

This generation. Last generation the PlayStation2 was one of Sony's major sources of profit.

It is the standard razor blade approach. Give away the razor. Make money on the blades.

Printers are the same - they are typically sold at cost. Profits are made from sales of replacement toner/ink.
post #35 of 93
All Amazon needs to do is make their reader for iPad better than iBooks, and offer more variety of contents than iBookstore (e.g., comic books). Also integrate Stanza (which they acquired last year) into the reader. Forget this Kindle hardware business.
post #36 of 93
Quote:
Originally Posted by Dr Millmoss View Post

If Amazon doesn't already have a name for this promotion, I suggest "Rekindle."

Well what do you call it when Apple gives away free iPods? \
post #37 of 93
Looks like they finally found a way to sell the Kindle.

This way there's no reason why you want to get other eBooks readers. And with Amazon Prime, you'll buy even more things from Amazon.

It's hard to imagine the backlash from angry Kindle owners who paid full price, but it's not like the Kindle never had a price drop twice in 3 months.
post #38 of 93
"The company recently purchased millions of Kindles, but has not given an exact number."

Amazon is buying Kindles?
post #39 of 93
Quote:
Originally Posted by Dr Millmoss View Post

If Amazon doesn't already have a name for this promotion, I suggest "Rekindle."

Or maybe that's too honest.

Or maybe "Kindling" - because that is all it might end up being in the end.
post #40 of 93
Quote:
Originally Posted by tipoo View Post

I just hope the iPad makes Amazon lower prices on the Kindle. The DX is nearly the same price with a fraction of the functionality, surely this will pressure them to lower the price.

Nod.

Quote:
Originally Posted by Dr Millmoss View Post

If Amazon doesn't already have a name for this promotion, I suggest "Rekindle."



Quote:
Originally Posted by Mazda 3s View Post

I am an Amazon Prime subscriber and don't currently own a Kindle. I welcome this news...

How many free readers would Amazon give away I wonder. Aren't there a lot of Prime subscribers?

Quote:
Originally Posted by Phizz View Post

Get ready for a flood of Kindles on eBay.



I'd buy one from eBay, to subscribe to newspapers.

Quote:
Originally Posted by jdlink View Post

I sense a paradigm shift in the ebook reader market.

Give away the reader, sell the e-books?

Quote:
Originally Posted by Mac Voyer View Post

As an Amazon Prime member, I wonder if I can get a free Kindle, sell it, and subsidize the price of the iPad I fully intend to purchase?



Quote:
Originally Posted by schmidm77 View Post

If Amazon is going to go down this road of giving away physical objects for free, they should be ready to deal with any anti-trust problems that arise. ... selling them for less than the cost to make them (or giving them away) to stave off competition is usually againt the law.

Quote:
Originally Posted by Orlando View Post

This is quite a clever idea by Amazon....
Give away the Kindle and rival manufacturers (who don't have their own ebook stores to help subsidize costs) will not be able to compete. ...

"Loss leader" is probably the concept here, you're right though, giveaways are done with software (eg, Google gives away everything for free) but hardware-wise I can't think of free giveaways to "sell razors," so to speak. I don't think it's illegal however.
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