Forrester Research recently completed a survey of 5,000 Americans in which it asked about the amount people would pay for e-book readers. Most respondents said they would not spend more than $100. That was bad news for Amazon (NASDAQ:AMZN) which has hoped to make its Kindle a mass market product. The Kindle sells for $299.
The e-commerce company went a long way toward solving its price problem by slashing the retail cost of the Kindle in the US to $249. Amazon will also begin to market the product in a number of countries around the world trying to push sales to levels well above most predictions.
Amazon announced its new product, the “Kindle with U.S. & International Wireless” which will allow readers to download content in over 100 countries. The global version of the Kindle will cost $279 and will ship on October 19. Amazon also said the Kindle is now the No.1 product sold on its Amazon.com website.
Amazon may have to cut prices on the Kindle further to move up sales volume to the levels the Apple (NASDAQ:AAPL) iPod has enjoyed. The multimedia player has shipped more than 200 million units since it was launched in 2001. Whether people will buy a product that is based on an interest in reading is not clear. Portable music and video devices may have a natural edge because among consumer electronics devices because they are based on the passive use of entertainment and not the active consumption of the written word.
That may be Amazon’s insurmountable hurdle. Reading is no longer as popular as it once was in the US. TV and the internet have taken consumers away from books much as they have hurt interest in newspapers. Kindle sales are based on a habit that is going out of vogue and that may be its Achilles heel.
Douglas A. McIntyre
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