Amazon’s Kindle 2 just got a pleasant $60 price cut, so it’s now just $299. Admittedly that’s still expensive, but it’ll likely boost sales of the e-reader a little in the flat economy. There’s a little more to it than that, though.
The $300 barrier is a bit magic–in the minds of many a consumer, $299 will sound a lot cheaper than $359 and a whole chunk more affordable than the Kindle 1’s original $399 price tag. And clearly Amazon would like to do all it could to push sales of the already-successful device. Someone at Amazon did the math and realized it can make this cut and still make a profit–but that begs the question what’s changed to make this possible?
The answer is most likely related to the recent acquisition of E-ink by Prime View international. We already suggested this would have one knock-on effect of boosting development of color e-ink displays, but it’s also clearly having economies of scale effects too. Now that both companies, who are the suppliers for the Kindle’s key technologies, are acting as a single body it’s obviously become cheaper to fabricate and assemble Kindles.
Amazon may be keen to push the price down for a whole bunch of other reasons too: Though the Kindle’s clearly the dominant e-reader, there’s an increasing crowd of competitor devices out there, many of them with sleeker designs than Amazon’s. The iPhone is also becoming a popular e-book device, and it’s obviously more tempting to read e-books on a small screen on a device you already own versus forking out hundreds of dollars for another gadget. There’s also a swirling Internet rumor that the Kindle will make an appearance outside the U.S. for the first time this year, in Germany, and Amazon will have to be careful to price the device at the right level for the European market.
[via Between the Lines]