Will Amazon cut Kindle prices to $149?

Amazon is likely to cut prices of the Kindle following the Apple iPad launch---at least if the e-commerce giant wants to minimize the sales hit---but the timing and details are uncertain.

In a research note, Piper Jaffray analyst Gene Munster said that Amazon can minimize the iPad hit if it cuts Kindle prices to $149 from $259, the current price.

That price cut would certainly preserve Kindle sales, but it's unclear whether Amazon would go to that price. Rest assured, Amazon's information systems will be watching Kindle sales for any sales hiccup and move accordingly on pricing.

Munster made the following points:

• The 5- to 10-year e-commerce outlook and Amazon's strong position outweighs any threat from the iPad.
• iPad users will be able to buy books for the Kindle store, but consumers will have a much easier time on iBooks. Munster notes:
• We see this as analogous to the current situation in digital music where iPod/iPhone users can download digital music files from Amazon, but the majority of users simply download music from the iTunes store, because it is more convenient.
• The Kindle store will have the selection advantage over the iBook store. Apple's iBook catalog will launch with 60,000 titles compared to the Kindle's 475,000.

More:

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