The Kindle Price Cuts Keep Coming

By Rick Aristotle Munarriz | More Articles
July 9, 2009 | Comments (2)

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It's been a summer of price cuts. Apple (Nasdaq: AAPL ) has introduced a $99 3G iPhone. Microsoft (Nasdaq: MSFT ) is selling advance copies of Windows 7 for as little as $49 over the next few days. It was just a matter of time before Amazon.com (Nasdaq: AMZN ) went all Crazy Eddie on its Kindle.

Amazon gave its trendy e-book reader a quiet $60 haircut yesterday. The second-generation Kindle is now selling, exclusively through Amazon, at $299. The larger DX model remains unchanged at $489, but that may change in a few months. The DX will be incorporated into five different college campuses in the fall, and Amazon should see how that goes before slashing away on that front.

The price cut on the standard model is a good move. Unless Oprah Winfrey is planning another Bezos lovefest, there's likely to be little buzz for a $359 Kindle until the holidays. There are also several rival Sony (NYSE: SNE ) Readers selling for less than $300 through Amazon.com itself.

With Amazon exploring ad-supported e-books, the price cut also comes at a time when the leading online retailer can make a serious dent in this market. If it's about to arm itself with the tools to offer discounted -- and perhaps even free -- ad-backed reads, it may as well reach as broad a base of book lovers as possible.

Amazon's Kindle is the hot name in e-book readers, but the company can never get too cocky. It has been quiet about announcing actual Kindle unit sales. This doesn't necessarily mean that Kindles have been selling poorly over the past two years. Amazon may simply be keeping its success close to its vest, as a way of keeping Sony -- and even real-world rivals cooking up e-book solutions including Barnes & Noble (NYSE: BKS ) and Borders (NYSE: BGP ) -- in the dark.

So let's not call this price cut desperate. As we've learned from Apple's significant iPhone price cuts over the past two years, you can do well and still price your wares aggressively.

Other page-turners in the Kindle saga:

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Longtime Fool contributor Rick Munarriz has been shopping online for about as long as Amazon.com has been in business. He owns a Kindle but doesn't own shares in any of the companies in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Report this Comment On July 09, 2009, at 2:02 PM, lemoneater wrote:

Thanks for the interesting article. Isn't this the 2nd price cut on the Kindle 2 since it's introduction this spring?
Report this Comment On July 11, 2009, at 2:53 AM, TMFBreakerRick wrote:

lemoneater, it hit the market in November of 2007 at $399. The price was cut to $359 in May of 2008. There was a temporary price cut after that tied to the Oprah Winfrey appearance, but the new version rolled out at $359 -- until this week.

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