Amazon.com Drops Kindle Price, The E-Reader Wars
Amazon.com has already dropped the price of its basic Kindle e-reader by $70 to $189. The moved followed a price cut of Barnes & Noble’s (NYSE: BKS) Nook from $199 to $149 and a similar price cut of the most…
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Both the Nook and Kindle face competition from Sony’s (NYSE: SNE) e-reader and the Apple Inc. (NASDAQ: AAPL) iPad, which is marketed in part as an electronic reading device.
Amazon.com also lowered the price of its most expensive Kindle–the DX.The Amazon website shows the new price at $379. It previously retailed for $499. The e-commerce company said that the new product would have “free 3G wireless: No monthly payments, no annual contracts.” The product also has a 50% better contrast for the clearest text and sharpest images. It holds up to 3,500 e-books and periodicals.
The competing iPad, which is essentially a flat screen portable computer, sells for $499 to $829, depending on features. The Kindle price cut brings its retail sticker well below the iPad.
The price cut on the high-end Kindle raises the question again of whether Amazon and Barnes & Noble can make money on the devices or if they are “loss leaders’ meant to sell e-books. The Amazon e-book store offers thousands of books with some best sellers available for only $9.99. Amazon has been at war with some publishers over whether its low price for e-books undercuts the profitable sale of physical books.
Amazon has, by some estimates, sold 4 million Kindles and has 60% to 70% of the market. The price cuts are designed to maintain its dominance in the marketplace. In the meantime, it may lose money on each e-reader and try to make it up on volume–one of the greatest mistakes that any company can make.
Douglas A. McIntyre
Contact [email protected] for any questions or corrections.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.