Kindle price drop - Too little, too late

Kindle price drop - Too little, too late

Summary: Hours following Barnes & Noble dropping the price for its Nook reader to $199, Amazon has slashed the price of its smaller Kindle to $189.

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Hours following Barnes & Noble dropping the price for its Nook reader to $199, Amazon has slashed the price of its smaller Kindle to $189.

Prior to this price cut, the Kindle and Nook were priced at $259.

There's clearly a war going on between Amazon and Barnes & Noble,the objective being to capture as much of the market share as possible. The idea isn't to make money from the hardware, but from the books subsequently sold. And you can't transfer books bought on one platform to another, which means you roll the dice, take your pick, and live with your decision (hence the reason why many eReader owners turn into such vuvuzlela carrying zealots for the platform they chose).

Both the Kindle and Nook share similar features -  an eInk screen, built-in (and free) cell connection to download books, Linux/Android OS. All that differs is the place you buy the books from. Down, once again, to ideology.

Then there's the iPad. Apple shifted 2 million of these in 60 days, so it's potentially captured what could be a fair chunk of the ebook market, something that both Amazon and Barnes & Noble should be worried about. On the plus side, both companies do offer apps for the iPhone and iPad allows users to buy and view content, so in that respect Apple offers a convenient convergence device. This Kindle price cut positions Amazon's hardware at less than half the price of the lowest-spec iPad.

Amazon might have been first with the Kindle, and there's no doubt that the company has managed to lock a fair chunk of the market to it's format, but Amazon isn't a hardware vendor (neither is Barnes & Noble for that matter) and has in the end underestimated the rate of change in the hardware sector. The Kindle of 2010 is basically the same device as the Kindle of 2007. Amazon's "if you build it, they will buy" approach worked, but left the company vulnerable to more agile players, leaving the book giant with little more than price cuts as ammo.

The problem with the Kindle (and Nook) is that it's a one-trick pony. One-trick ponies are cool in an ecosystem where there are no other ponies doing tricks. Add more ponies doing more tricks, and the one-trick pony gets long in the tooth real fast. This is the problem Amazon is now facing up to. eInk screen aside, the iPad does more than the Kindle can dream of doing, and in a world where people want to carry with them fewer gadgets, the Kindle will lose out.

The clock is ticking. Unless Amazon can find a model that allows it to offer a greater subsidy for the Kindle, it's basically toast.

I still hold by my belief that the Kindle is living on borrowed time, and that three years from now it will be gone.

Topics: Hardware, Amazon, iPad, Mobility

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17 comments
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  • RE: Kindle price drop - Too little, too late

    I agree with you. Only possible way for Kindle to survive is that Amazon should provide it free with two years contract requring buyer to purchase certain amount of e reading content. Cell phone providers have been using this model successfully for years.
    hvakharia
    • Prefer buying hardware to NOT lock into contract

      @hvakharia Using same argument about technology changing; why lock into a 2 year contract to buy eBooks from one seller in order to get a free eReader? With a sweet price point, I would pay for the hardware instead and think Kindle is near that point with new price drop.
      robschertzer
  • Stop comparing it to the Ipad!

    I am not alone when I say that I don't want to be bothered by email and tap tap when I want to read. People who buy Ipads are (generally) not serious readers. Will they read a page or two to kill time? Yes. But did the purchase the ipad with the sole intent of using it as an e-reader?

    No.

    The Kindle, and all other e-readers like it are lightweight, e-ink is like paper and easy to read, the battery lasts two weeks, a feat the Ipad cannot match, and has bookstores that number their book catalogues in the hundreds of thousands, as opposed the the ibooks "tens of thousands".

    Smart phones didn't kill "single-purpose" non-smartphones, a "one trick pony" is exactly what I want when I want to read.

    On another note, Jeff Bezos did state that they basically could have given the Kindle away for free and then made some kind of contract, but he didn't want to put that ongoing charge on the customers. I'm glad for that- now at the new price (and even at the old ones) it's a great deal. I already have enough monthly obligations, I do not want one more.

    It's never low enough for anyone is it? When the Kindle was $350, and they lowered it to $259, now it's seventy dollars less and below the two hundred dollar price point and people still want it cheaper. $189 is an awesome price that might cut into the sales of the cheaper e-readers like the Kobo or the Cooler or Sony pocket- why buy one of the stripped down, bare bones e-readers, when you can get one with more features for only ten, twenty dollars more?

    There was another article that stated the Kindle, and other e-readers, will be dead within a year, maybe less. Yeah, epic predictions. And there's no chance that the Iphone will garner any significant market share.
    Anarel1868
  • RE: Kindle price drop - Too little, too late

    I disagree. What this article fails to mention is that the Kindle/Nook use e-Ink. Unlike the backlit LCD technology used by Apple, e-Ink is very easy on the eyes and perfect for providing a book like reading experience (but you can carry an entire library in the palm of your hand). People buying iPads are not doing so because they want an eReader -- they want a thin light PC. Yes, iPads do a lot more than Kindles, but when it comes to books it is like reading on a PC. The Kindle is a far better platform for "just" reading.

    I think the Kindle is still too expensive. I think $99 would be about perfect -- or better yet, FREE with an Amazon Prime membership. Free Kindles would really be the way to go, because once enough people have them in hand then Amazon can start going after authors to have them publish directly instead of going through traditional publishers.

    I also think Apple may have something to worry about in the future. Qualcomm's Mirasol technology is really cutting edge. An e-Ink type display (not backlit) that is in color and capable of supporting video. Qualcomm is reportedly partnering with Amazon, and this technology could be the iPad killer. So don't count Amazon out quite yet.
    daithi1966
    • RE: Kindle price drop - Too little, too late

      @daithi1966 The survival of the Kindle has nothing to do with the benefits of e-Ink. And yes, at this point they have no choice, in my mind, but to figure out a way to give away the Kindles while taking a smarter approach to how they sell their eBooks.
      Fahoobagaus
  • RE: Kindle price drop - Too little, too late

    The iPad is nothing more than a gimmick. Yes it might have more functions that an e-reader, but its real competition isn't the e-reader market at its price point its competition is Netbook and Table PCs. In that regard the only thing it has over them are size while for total computing power and versatility most beat out iPad hands down. Yes it has gotten and will continue to get those people that just have to have the next apple gadget those with more intelligence than money are going to stay away from it for now.

    The bottom line is an ebook reader is much better for reading ebooks. Especially when it is e-ink which most are. While I'm partial to the Kindle almost any ebook reader is better. Much better battery life and much better on the eyese. I'll stick with my Kindle or something like the nook for ereading.
    Sorwen
    • RE: Kindle price drop - Too little, too late

      @Sorwen The iPad doesn't currently have any competition. Tablets running various OS's have been out for years but never really took off. Mainly because of the UI and cost. The niche they were <i>supposed</i> to fill was taken over by netbooks. <br><br>The iPad, on the other hand, is the first truly usable slate and fits an entirely different use than a desktop or laptop. Just look around and observe how people interact with their phones and/or media players these days. Apple just provided a product that will allow people to do the same things, just on a larger more powerful device.<br><br>You're also right that Apple doesn't have to compete with the eReader market. They already have a market share much larger (it's only a matter of time until iBooks makes it onto all iPhone OS devices). And I've noticed that the majority of readers don't find the benefits of e-Ink all that alluring. Think about it, eReaders have been on the market for years, and despite the vast number of avid readers that are gainfully employed with expendable incomes, they've never been big sellers. On the other hand, brand new shiny sort-of computer gets released from Apple and many of those same avid readers that passed on a Kindle were in line for an iPad.<br><br>One last thing: I've noticed many that commentators have an elitist attitude regarding the digestion of literature and iPad owners. I can tell you, flat out, that you're all woefully incorrect. The market for people that currently purchase many eBooks on multiple cross platform market places (Kindle, Nook, as examples) is astounding. And since many of these people are comfortable with technology as is, many are going to obviously be interested in an iPad.
      Fahoobagaus
  • RE: Kindle price drop - Too little, too late

    Uh, people buy the Kindle (or nook) to read books. The Ipad is neato and all that, but I would hardly consider it as a good alternative for someone who wants to read books. The competition for the Kindle (besides other e-readers) is books themselves, not laptops/ipads/pcs.
    mikebrady07
  • RE: Kindle price drop - Too little, too late

    Man, I'm so tired of pundits explaining that the Kindle and Nook must die because they do one thing only. That's the whole point of their existence. We're not in Alton Brown's kitchen. We can buy and use uni-taskers. The Kindle and Nook display books in "easy on the eyes" ink. And they don't require a monthly online fee for downloads. I read a couple books a week and, even though I lust for an ipad, I don't see it as a replacement for my Kindle. My TV maybe, but certainly not my Kindle.
    dennishenley
  • RE: Kindle price drop - Too little, too late

    Until I can buy ebooks at a comparable price to used paper books and sell or give it away when I'm finished with it I don't care how cheap the hardware is.
    IMHAL9000
  • Doesn't matter

    Apparently everyone who really wanted the e-Ink display for the practicality is distracted by the "snappy scroll & zoom" of the iPad and to hell with their eyes.
    MSFTWorshipper
  • Sigh

    Another tech writer amazed that people would only want to read books. Hey, I don't want the distraction a laptop, smartphone or tablet brings with it, not to mention the eyestrain. The eReader does exactly what I want (and nothing I don't) at a price much lower than the alternatives, with no commitments. Have fun w/ your expensive, trendy, ADHD-inducing iFad!
    wmav04
  • RE: Kindle price drop - Too little, too late

    Loved the "vuvuzela carrying" part :D
    BTW, it's vuvuzela, not vuvuzlela. And it's going to be one of the words of the year for 2010, trust me
    Best of luck to the USA for today's match!
    city_zen
  • I agree

    I always thought it was brazen that Amazon charged so much for a single-use device aimed squarely at locking you into their market place. I remember reading some interview where Bezos stated, with I assume a straight face, that lowering the price of the Kindle would force him to employ a contract model similar to cell carriers. I stopped and seriously pondered how such a person ever became a successful business man.<br><br>I've been saying it for years, these things needed to either be fully subsidized and given away to build a base of customers for your eBooks, or priced no higher than $150 (essentially the cost of the most expensive components) and the price of the digital content reduced (fight the publishers). But that, the $150 price, was before the iPad, and with it soon the age of the slate. eInk readers are now going to become horrifically niche products. They may have had a chance if Bezos had had the foresight to flood the market early and create a huge customer base. Now, most people will be buying them from Apple (even if they don't own an iPad, but rather an iPhone or iPod - which practically everyone does).
    Fahoobagaus
  • RE: Kindle price drop - Too little, too late

    But I don't WANT an iPad that does all these things. I want a device that does exactly what I want it to do without making compromises that harm that core functionality.

    One of the things that pisses me off is how the gadget whore culture has taken (another?) wrong turn. There's a "Need" culture, where non-gadget buyers live... there's a "Want" culture, where gadget buyers normally live with gadgets that do a great job and add so much to life.

    Then there is the "Value Whore" culture, who buys cell phones that make crappy calls, TV's with 3D for which there is no content, and game consoles that feature clunky web browsers. We are falling victim to Bullet-Point advertising: "It Only Does Everything"... but does nothing particularly well...
    edgeofblade
  • RE: Kindle price drop - Too little, too late

    ...I wouldn't trade my Kindle for a dozen iPads -- unless, of course, I could sell the iPads on eBay and then go buy a new Kindle and a bunch of books!...while the Kindle could stand some improvements, it is still WONDERFUL for reading...I tried reading a book on an iPad at a local Apple store and all I could see was the reflection of my face...I really don't think iPad will gain many kudos for reading purposes...
    rrtzmd
  • one trick ponies...

    "One-trick ponies are cool in an ecosystem where there are no other ponies doing tricks." So how do you explain the Flip camera? The reason it is so awesome is that it does only one thing, and does it well.
    nothelga