Amazon drops price with $114 ad-based Kindle e-reader coming May 3
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.
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.
Comments
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.
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"
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.
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.
Still, in the menu and in the screen saver is still more than I want to see.
To each his own
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.
Um...Nice try. Failed.
Admittedly it's not going to payback movies or Flash stuff but still, web access anywhere with no contract?
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.
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.
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.
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...