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Amazon drops price with $114 ad-based Kindle e-reader coming May 3

post #1 of 39
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As consumers increasingly turn to the iPad for reading, Amazon has bottomed out on price in order to compete, announcing a cheaper ad-supported version of its Kindle e-reader.

Amazon announced on Monday the new 'Kindle with Special Offers,' which will go on sale starting May 3 for $25 less than the standard $139 Kindle. The device identical to the third-generation Kindle and is currently available for pre-order.

The new device will display ads and special offers on the screensaver and on the bottom of the home screen, but not during reading. The ad-supported Kindle, which is Wi-Fi only, will include offers such as a $20 Amazon Gift Card for $10, 6 Audible Books for $6, and an album from the Amazon MP3 Store for $1.

Launch sponsors of the device will include Buick, Chase, Olay and Visa.

Last December, Amazon Chief Executive Jeff Bezos revealed that the third-generation Kindle had become the best-selling product in the company's history. However, Amazon declined to disclose actual sales figures.

"We're seeing that many of the people who are buying Kindles also own an LCD tablet," Amazon Chief Executive Jeff Bezos said. "Customers report using their LCD tablets for games, movies, and web browsing and their Kindles for reading sessions."

Despite the fact that the Kindle had a several year head start on Apple's iPad, the successful launch of a feature-rich tablet by Apple has forced Amazon to compete on price. Last year, rather than add features and more robust media capabilities, Amazon stuck with the low-cost e-ink display and slashed the prices for its third-generation Kindle.



However, Amazon may now be looking to cultivate a healthy app ecosystem for the Kindle platform. Last month, AppleInsider reported that prominent developers for iOS were being contacted by Amazon inviting them to port their apps to Kindle.

Responding to the news of an ad-based Kindle, pundits expressed surprise at the $114 price tag, noting that a $99 price tag would have made more sense. As such, speculation has arisen that Amazon's margins on the Kindle have bottomed out, with some suggesting that the online retailer may be selling the e-reader at a loss.

In contrast, rival Barnes & Noble took the opposite approach last year when it moved away from e-ink and introduced the Nook Color, an Android-powered 7-inch tablet and e-reader hybrid with an LCD screen.

In addition to being significantly cheaper than an LCD screen, e-ink comes with its own advantages. Since it does not require a backlight to operate, readers experience less eye strain and can read more easily in direct sunlight.

Apple has shown interest in e-ink technology, as evidenced by a patent application discovered by AppleInsider last week. The filing described a hybrid e-ink-LCD display that could switch between the two types of screens as needed.
post #2 of 39
At $114, how is it competing with the iPad? Quite frankly, neither is a competent replacement for the other. Gawd, I hate it how news outlets have to make it seem like it's Apple versus everyone else in just about every single story. It gets rather old.

Hell, at $114, I'd have both of them (an iPad and an Kindle). It seems like a no-brainer at that price tag for me.
post #3 of 39
So Amazon is very clever. It's not a Kindle with ads...it's a Kindle with special offers.
post #4 of 39
Quote:
Originally Posted by chabig View Post

So Amazon is very clever. It's not a Kindle with ads...it's a Kindle with special offers.

Well, at least they didn't call it "magical"
post #5 of 39
I'd never read a book on my iPhone 4 or my iPad 2, but would on my Kindle 3. I still by far prefer a paper book, but the Kindle is next best thing, simply because of E-Ink. It's just a shame the screen is so small and the hardware is poorly built and designed.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #6 of 39
If I buy a Kindle, I'd much rather pay the extra $25 and not have ads. I just don't see the $25 being a good trade-off for 2+ years of seeing ads.
post #7 of 39
Quote:
Originally Posted by JeffDM View Post

If I buy a Kindle, I'd much rather pay the extra $25 and not have ads. I just don't see the $25 being a good trade-off for 2+ years of seeing ads.

If the ads don't display while reading, I don't see what the big deal is. It is after all a reading device, and the ads don't interfere with that mission.
post #8 of 39
iPad 2 lights fire under Kindle.
post #9 of 39
Quote:
Originally Posted by Mazda 3s View Post

If the ads don't display while reading, I don't see what the big deal is. It is after all a reading device, and the ads don't interfere with that mission.

Still, in the menu and in the screen saver is still more than I want to see.
post #10 of 39
Quote:
Originally Posted by JeffDM View Post

Still, in the menu and in the screen saver is still more than I want to see.

To each his own I spend my time reading, not staring at menus. And the last time I spent more than a few seconds staring at a screen saver was when After Dark screen savers were all the rage in the 90s
post #11 of 39
And of course, anything anyone ever does is about the iPad.

Ridiculous tie-in aside, 25 dollars isn't nearly enough incentive to view ads for the rest of the products life. Half off and I would consider it.
post #12 of 39
Oh hell, just go on and give it away like Google does Android OS. Have it firmware linked to Amazon so you can only buy from there, and load it down with ads. If you can't win by building something superior enough that people are willing to pay for it, give it away and find another way to monetize it.
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post #13 of 39
Like the idea, nonplussed at the execution. Just $25 off? And a retail of the, incredibly unappealing-sounding "$114"?

Um...Nice try. Failed.

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MacBook Pro 15" | Intel Core2 Duo 2.66GHz | 320GB HDD | OS X v10.9
Black/Space Grey iPad Air with Wi-Fi & LTE | 128GB | On 4GEE
White iPhone 6 | 64GB | On 3UK

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post #14 of 39
So the Amazon page for Kindle says they now have a WebKit browser for free 3G browsing. So if I get the 3G model I can surf the internet via 3G for the life of the Kindle?

Admittedly it's not going to payback movies or Flash stuff but still, web access anywhere with no contract?
post #15 of 39
You say: "As consumers increasingly turn to the iPad for reading, Amazon has bottomed out on price in order to compete, announcing a cheaper ad-supported version of its Kindle e-reader."

What's the evidence for that? The fact that iPads are selling well doesn't mean people are buying them to read ebooks, least of all ebooks from the iBookstore. People get iPad primarily for reasons other than reading ebooks. They get them for games, movies and web browsing, as well as various apps. They get Kindles for reading, which is why the Kindle is also selling like hotcakes. And one thing you can know for certain is that someone who buys a Kindle buys it to read ebooks. Don't equate rising iPad sales with falling Kindle sales. That's not happening. No one with a $139 product needs to cut its price to compete with one selling for $500 and up. A KIA subcompact isn't competing with a Mercedes SUV.

Even more important, Kindles are taping a wholly new market for digital gadgets. They are selling and being given to people who will never get interested in gadgets like the iPad. I know several such people who like to read so much, a friend or spouse gave them a Kindle and they love it. I don't know of a single similar example with an iPad. Heck, I don't even know anyone who likes their iPad primarily for reading. The closest is a lawyer who puts all the documents in a case on his iPad and uses the instant search and find to intimidate opposing counsel. That's not reading.

Amazon is doing three things with this move. First, they're moving toward the magic $99 price point where a Kindle supposedly becomes an impulse purchase. Second and most important, they are competing with Nooks and other ereaders that also sell for just over $100. That's where their real competition is. And third, they've created a platform to advertise their own products with special offers. That may prove so effective, they may soon able to offer a price cut larger than $25. And what they are doing may beat Apple's struggling iAds scheme.

Something even more critical could happen. An Amazon study in the UK recently discovered that people who buy Kindles buy three times as many books in the six months after that purchase as they did in the six months before. That may not mean they're reading more, but it does mean that more of what they read comes from Amazon, so much more that in a year or so Amazon may be able to look at its customers and pick out those it could give a free Kindle and profit from increased sales.

You might ask yourself how a $500 iPad is going to compete with a free Kindle.
post #16 of 39
Looks like a death spiral to me . . .
post #17 of 39
Quote:
Originally Posted by tundraboy View Post

Looks like a death spiral to me . . .

I agree. Soon they'll have to give away the Kindle, with the hope that they can make money on books they sell.

Apple, otoh, makes its money on hardware. The content (music, books, movies...) is simply a way to sell more high-margin hardware.

Tough to replicate.
post #18 of 39
How about they open up access to Standard and Open ePubs and I'll gladly pay the $150 for a no ad version.
post #19 of 39
I would rather spend the extra $25 for the regular version.
post #20 of 39
Quote:
Originally Posted by tundraboy View Post

Looks like a death spiral to me . . .

I doubt the Kindle will die any time soon. My guess is one more version of eink only then a hybrid screen model.
post #21 of 39
Quote:
Originally Posted by Jensonb View Post

Like the idea, nonplussed at the execution. Just $25 off? And a retail of the, incredibly unappealing-sounding "$114"?

Um...Nice try. Failed.

They need to make it either $119.99 or $109.99...

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Proud AAPL stock owner.

 

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post #22 of 39
Quote:
Originally Posted by Inkling View Post

You say: "As consumers increasingly turn to the iPad for reading, Amazon has bottomed out on price in order to compete, announcing a cheaper ad-supported version of its Kindle e-reader."

What's the evidence for that? The fact that iPads are selling well doesn't mean people are buying them to read ebooks, least of all ebooks from the iBookstore. People get iPad primarily for reasons other than reading ebooks. They get them for games, movies and web browsing, as well as various apps. They get Kindles for reading, which is why the Kindle is also selling like hotcakes. And one thing you can know for certain is that someone who buys a Kindle buys it to read ebooks. Don't equate rising iPad sales with falling Kindle sales. That's not happening. No one with a $139 product needs to cut its price to compete with one selling for $500 and up. A KIA subcompact isn't competing with a Mercedes SUV.

Even more important, Kindles are taping a wholly new market for digital gadgets. They are selling and being given to people who will never get interested in gadgets like the iPad. I know several such people who like to read so much, a friend or spouse gave them a Kindle and they love it. I don't know of a single similar example with an iPad. Heck, I don't even know anyone who likes their iPad primarily for reading. The closest is a lawyer who puts all the documents in a case on his iPad and uses the instant search and find to intimidate opposing counsel. That's not reading.

Amazon is doing three things with this move. First, they're moving toward the magic $99 price point where a Kindle supposedly becomes an impulse purchase. Second and most important, they are competing with Nooks and other ereaders that also sell for just over $100. That's where their real competition is. And third, they've created a platform to advertise their own products with special offers. That may prove so effective, they may soon able to offer a price cut larger than $25. And what they are doing may beat Apple's struggling iAds scheme.

Something even more critical could happen. An Amazon study in the UK recently discovered that people who buy Kindles buy three times as many books in the six months after that purchase as they did in the six months before. That may not mean they're reading more, but it does mean that more of what they read comes from Amazon, so much more that in a year or so Amazon may be able to look at its customers and pick out those it could give a free Kindle and profit from increased sales.

You might ask yourself how a $500 iPad is going to compete with a free Kindle.

I don't know what you're talking about. I've read more lately with the iPad then I have with paper. The Kindle App and iBooks make it a no brainer.

In any event, I think it can be agreed this is a move for survival for Amazon, not intended to be in any way an "iPad Killer".
post #23 of 39
I don't dislike e-ink. It is a good idea. The Kindle needs color e-ink. It is available on other devices used for advertising. It just needs a little work. Color e-ink will never look as good as something on an LCD screen but it would look better for book covers and illustrations than just black and white.

Last week I was looking at books on Amazon. In the past I've complained that the prices of e-books are still too high. I still feel that way. On the Amazon site I found a couple of books available new for under three dollars. These were paperback books. The same versions were available on the Kindle for $9.99. The math just doesn't add up. If publishers or book sellers can earn a profit selling a new paperback book for under three dollars then what is the real profit on such a book?

Why can't a publisher take the same profit from an e-book and just sell the damn thing for $.25 or $1.00? I'd really like an answer to this. It would be almost all profit with none of the extra work involved with printing and shipping. When publishers do that I'll be into e-books in a big way.
post #24 of 39
Quote:
Originally Posted by anantksundaram View Post

I agree. Soon they'll have to give away the Kindle, with the hope that they can make money on books they sell.

Apple, otoh, makes its money on hardware. The content (music, books, movies...) is simply a way to sell more high-margin hardware.

Tough to replicate.

Amazon is not just thinking books. Amazon is definitely trying to create the a device that can be used to buy and consume anything digital. It could be Android apps, music, video, books, etc. and this is just a step in that direction (using ads to promote their digital contents). "Kindle Color" will be in mass production mode by the end of this year, and that's when you'll see all these experiments from Amazon (Android Appstore, Kindle with ads) paying off.
post #25 of 39
Quote:
Originally Posted by Mazda 3s View Post

To each his own I spend my time reading, not staring at menus. And the last time I spent more than a few seconds staring at a screen saver was when After Dark screen savers were all the rage in the 90s

I don't stare at menus or need screen savers either, but it's an added mess that doesn't need to be there for the meager price difference given. It is a bit of a matter of principle. I've never bought a media device where the device itself serves up its own ads to fund said device, I'm not seeing why I should start now, there's enough ads plastered on everything now.
post #26 of 39
Yeah, what he said.

I own both because they both do different things well. Just as my cars, truck, boat, and motorcycle, all do different things well.
post #27 of 39
They are testing the model for when they release an Android Tablet. I guess they'd come to the conclusion that it's hard to compete with iPad on price without clever tactic.
post #28 of 39
Quote:
Originally Posted by ThinkKnot View Post

So the Amazon page for Kindle says they now have a WebKit browser for free 3G browsing. So if I get the 3G model I can surf the internet via 3G for the life of the Kindle?

Admittedly it's not going to payback movies or Flash stuff but still, web access anywhere with no contract?

That's correct. Free unlimited browsing, even abroad.

However, the e-Ink display makes browsing painful. The refresh rate of the screen isn't high enough to make scrolling smooth.
post #29 of 39
Quote:
Originally Posted by CaptRied View Post

they both do different things well.

Precicely. And if you are in Europe and moving across countries a lot, the Kindle 3G is absolutely faboulous. Imagine being at a skiing resort in Austria nad running out of lecture - thanks to the 'free' 3G your next book is just a click away. On an iPad2 3G not only do you need a second subscription to a 3g service but you also have to pay roaming charges, which usually clock in at a nice 2-3 /MB.

To the (US) american lambda this may not sound like a big deal, but for those travelling a lot through Europe it actually is
post #30 of 39
Quote:
Originally Posted by ThinkKnot View Post

So the Amazon page for Kindle says they now have a WebKit browser for free 3G browsing. So if I get the 3G model I can surf the internet via 3G for the life of the Kindle?

Admittedly it's not going to payback movies or Flash stuff but still, web access anywhere with no contract?

That's been there for a while. Even the second generation device has it courtesy of a free update. In my opinion it's one of the strongest reasons to own the device.

It's not the natural, immersive web experience that the iPad is but it's definitely useable if you know a few tricks. And the battery life is insane.

I travelled with a friend who had one in the US last year and used it to book accommodation, check email and maps when outside of wifi range. It rescued us from more than one bind.

The only concern is that they classify it as an "experimental" feature - which is really just a nice way of saying they don't have to honour their promise to provide you free internet access in 20 years if it doesn't turn out to be the amazon store cash cow they thought it would be.
post #31 of 39
Quote:
Originally Posted by drobforever View Post

Amazon is not just thinking books. Amazon is definitely trying to create the a device that can be used to buy and consume anything digital. It could be Android apps, music, video, books, etc. and this is just a step in that direction (using ads to promote their digital contents). "Kindle Color" will be in mass production mode by the end of this year, and that's when you'll see all these experiments from Amazon (Android Appstore, Kindle with ads) paying off.

That's a long time thinking. Good luck (to them).
post #32 of 39
Quote:
Originally Posted by drobforever View Post

Amazon is not just thinking books. Amazon is definitely trying to create the a device that can be used to buy and consume anything digital. It could be Android apps, music, video, books, etc. and this is just a step in that direction (using ads to promote their digital contents). "Kindle Color" will be in mass production mode by the end of this year, and that's when you'll see all these experiments from Amazon (Android Appstore, Kindle with ads) paying off.

Are you speculating on a Kindle Color this year? I can't find a reasonably credible rumor of one anywhere.

Quote:
Originally Posted by Dunks View Post

That's been there for a while. Even the second generation device has it courtesy of a free update. In my opinion it's one of the strongest reasons to own the device.

It's not the natural, immersive web experience that the iPad is but it's definitely useable if you know a few tricks. And the battery life is insane.

I travelled with a friend who had one in the US last year and used it to book accommodation, check email and maps when outside of wifi range. It rescued us from more than one bind.

The only concern is that they classify it as an "experimental" feature - which is really just a nice way of saying they don't have to honour their promise to provide you free internet access in 20 years if it doesn't turn out to be the amazon store cash cow they thought it would be.

Are you saying they think the internet browsing is experimental, or the Kindle business as a whole? I think the speed of the screen makes it a device of last resort for general web browsing, as the speed of the screen improves, they might start pushing data plans for web use.
post #33 of 39
Sell it for $25 with ads and I would buy it.
post #34 of 39
That's like buying a car covered in NASCAR decals and getting a whole $100 off.

Is somebody that poor in the market for a Kindle???
post #35 of 39
Quote:
Originally Posted by Mazda 3s View Post

If the ads don't display while reading, I don't see what the big deal is. It is after all a reading device, and the ads don't interfere with that mission.

I think his point was more about the cost, which is the criticism many people are raising about this offer so far. if it's going to be full of ads and free, that makes sense. If it's only 25 bucks off it isn't worth it.
post #36 of 39
I'm surprised that a book publisher isn't one of their launch partners. It would make a lot of sense to put book ads on there.
post #37 of 39
Paying $79 for the privilege of paying them for books, AND being sent ads? Thats an insult of cable-TV magnitude!

Now, if it costs $114 and the ads involve any kind of tracking of your personal data (as online ads tend to do) then thats another matter...
post #38 of 39
Quote:
Originally Posted by ThinkKnot View Post

So the Amazon page for Kindle says they now have a WebKit browser for free 3G browsing. So if I get the 3G model I can surf the internet via 3G for the life of the Kindle?

Yes, but do not expect much from the browser.
post #39 of 39
Quote:
Originally Posted by Mazda 3s View Post

At $114, how is it competing with the iPad? Quite frankly, neither is a competent replacement for the other. Gawd, I hate it how news outlets have to make it seem like it's Apple versus everyone else in just about every single story. It gets rather old.

Hell, at $114, I'd have both of them (an iPad and an Kindle). It seems like a no-brainer at that price tag for me.

Kindles are very nice, well worth $114. I paid $199 for a 2nd-gen.

I think the article is making the argument that multi-purpose tablets have put pressure on Amazon's Kindle (and likely other e-Ink readers), and in response, Amazon has had to drop prices to compete, and now they speculate that the $114 price indicated they've hit bottom with prices. Since Amazon doesn't report sales numbers, it is hard to confirm directly. But usually when the price of a hardware device drops, it means the market at the higher price is saturated. A $25 price drop seems pretty small. I'd still recommend a kindle at $139 for novels and books that are mostly text to be read linearly. Books with lots of color, tables, charts, source code, math equations, etc, or any book that you'd want to flip through, it looks better on the iPad.

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