Now that the rubble has cleared as a result of last week's price war on e-book readers, Amazon.com (Nasdaq: AMZN ) is back with another Kindle markdown.
This time, Amazon is slashing the price on its seemingly forgotten DX model. The larger reader -- similar in size to Apple's (Nasdaq: AAPL ) iPad -- had stubbornly stuck to its original $489 price tag. A new and improved version will begin shipping next week for $379.
Alas, for Amazon, the cut is too little, too late.
Amazon rolled out the DX last year, when its flagship Kindle fetched $359. The leading online retailer has been aggressive with price reductions on its smaller model, which dropped to $299, $259, and now $189. But all the way down, Amazon held firm with the DX at $489.
Still, today's price cut isn't enough. It simply means that the slightly larger reader is now twice as expensive as the original model. The $489 price was a mistake when Apple's iPad started at $499, but it's not as if $379 will change anyone's mind.
Amazon tried to position the DX as a substitute for classroom textbooks and daily newspapers. It had even struck deals with a few campuses. New York Times (NYSE: NYT ) and Washington Post (NYSE: WPO ) initially offered discounted DX readers in exchange for long-term digital subscriptions to customers outside of its physical delivery area.
None of this seemed to move any significant needles, so Amazon turned its promotional attention back to its mainstream Kindle.
I predict the new push for the DX will similarly backfire. Since the DX's screen size is similar to Apple's iPad, Amazon is effectively telling customers that the larger size is twice as valuable as its $189 Kindle. It's practically an endorsement of the iPad's value, even though Amazon's press release pitches the benefits of its free 3G connectivity for downloads and the glare-free advantages of its E-ink screen.
Unfortunately for Amazon, rivals Sony (NYSE: SNE ) and Barnes & Noble (NYSE: BKS ) have also apparently struggled to set themselves apart from the iPad with somewhat similar specs to the Kindle. Consumers are choosing flashy, colorful tablets -- backlit glare and all -- that play video and games, surf the Web in full color, and display e-books. Apple has moved 3 million iPads in less than three months.
While DX price cut is long overdue, eventually Amazon will have to tackle Apple with more than just margin-crushing price cuts.
Will your next gadget purchase be a Nook, a Kindle, or an iPad? Share your thoughts in the comments box below.
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