Though Amazon has never revealed how many Kindles it has sold, there is no doubt that the e-reader has achieved critical and commercial success. With the emergence of a plethora of tablet devices capable of emulating the Kindle’s core functionality, the Seattle-based online retailer needs to remain competitive in the e-reader market through price reductions. How does Amazon plan to drop the price of the Kindle, which already is relatively cheap? Advertisements.
Set to launch with a new Special Offers service, the new Kindle will be priced at $114, a full $25 less than its predecessor. By bombarding users with advertisements on the bottom of the device’s home page and on its screen savers, Amazon is able to subsidize the price of the Kindle, anticipating a significant surge of advertising revenue from companies like General Motors and Visa.
The reduction, which has recently been confirmed through a press release, follows Amazon’s pricing trend in the past few years. The Kindle was initially priced at about four hundred dollars, but by removing the 3G antennae and subsidized book delivery over Sprint’s network, the company has gradually brought down the device’s price to well-below two hundred dollars.
With the popular e-reader’s price reduction comes the possibility of adding a significant number of users to the already-large Kindle camp. By solidifying its market share, Amazon will be able to compete with the technology giants, namely the iPad and innumerable Android-powered tablets, in the future by drawing from a loyal fan base. Additionally, numerous institutions, notably the education sector, will likely adopt the e-reader and apply it to an emerging demographic.
What do you think? If you were considering purchasing a Kindle, will this nudge you in the right direction? Are you turned off by the possibility of viewing advertisements on your next e-reader? Sound off in the comments below.
[Source – Associated Press]