Thursday, July 09, 2009

Amazon Drops Price of Kindle

In a move lifted right out of the Marketing 101 textbook, Amazon announced yesterday that it is dropping the price of its basic model Kindle to $299. The company seems to have caught up with demand to the degree that it has inventory to spare and is willing to bet that its bottom line will increase more by selling more units at the new, lower price than by selling fewer units at a higher price.

According to Information Week, the price change was announced very quietly:
The price change was made quietly too -- the company posted an ad for the Kindle 2, at the new price, on its home page.

The stock market didn't react much to the change; Amazon shares rose Thursday by 74 cents to close at $78.10, up less than 1 percent.

Amazon launched its first version of the Kindle in November of 2007 for $399 and later dropped the price to $359. The Kindle 2 -- which has longer battery life, more storage, and turns pages faster -- was introduced in February.

Prices for the Kindle DX, which has a 9.7-inch screen instead of a 6-inch screen, remain unchanged at $489.

Book publishers are concerned that Amazon might use the lower price to squeeze their profits because the Kindle is so dominant. Amazon could also raise book prices for users.
I'm kind of waiting for that other shoe to drop, too. It would be probably be risky for Amazon to raise e-book prices just when the company drops the price of its reader - but if any company would try to pull that one off, it just might be Amazon.

7 comments:

  1. I have two friends who bought Kindles less than a week ago. When they saw that the price had been dropped. they immediately asked Amazon for a refund of the difference between what they paid and the new price, and were told (also immediately) that their refund was in the mail.

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  2. I've been dying to get a Kindle, so this is good news. Thanks for making my day. :)

    Erin in Boston

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  3. Thank goodness for that, JoAnn. They would have really created a stink if they had refused a refund of the markdown. A business just can't get away with that in the internet age - would be suicidal on their part.

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  4. Erin, here's hoping you get a Kindle now and that you'll let us know what you think about it.

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  5. I do not have a Kindle, but a someone who does just posted that Oprah.com is having a free download of the book "Heroic Measures" by Jill Ciment on July 20 for just 48 hours, if anyone reading your blog is interested. This book sounded good to me

    http://www.amazon.com/Heroic-Measures-Novel-Jill-Ciment/dp/0375425225/ref=sr_1_1?ie=UTF8&s=books&qid=1247260903&sr=1-1

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  6. Could someone tell me how to post a URL link on this blog, rather than just a URL?

    Thanks!

    JOANN

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  7. Thanks for the info, JoAnn.

    I can't remember the coding to do what you're asking about. If it comes to me, I'll try it out to see if it works in the comments section. But I doubt that it will magically re-enter my mind.

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