Please tell us you're joking, Amazon.com (Nasdaq: AMZN ) . No? Who, then, are these consumers who will pay $489 for the new Kindle DX e-reader, billed by some as a potential savior for the ailing newspaper industry?
Shoppers I've heard from are impressed with the product, but not the price. "I want the Kindle SO bad but it's just too expensive! They've overshot price point in this economy," says Melanie Haiken, a writer who responded to my request for comment via Twitter.
David Vinjamuri, a branding expert who teaches at New York University, agrees:
The Kindle DX looks like a great concept, but it's overpriced. It shouldn't cost more than a netbook. This is a problem for the Kindle 2 as well. I still might have bought it had I not already bought a Kindle 2 just two months ago. I am vexed with the Amazon product launch strategy which looks reactive rather than thought out. It seems designed to aggravate the brand's most loyal users.
Precisely. The problem isn't the device itself but the price point. (Check out what fellow Fool Rick Munarriz had to say today for a different point of view.) A large-format screen should make this latest Kindle attractive to those who've signed up for digital editions of newspapers supplied by Gannett (NYSE: GCI ) , News Corp. (NYSE: NWS ) , and New York Times Co. (NYSE: NYT ) . Magazines, too.
But Amazon isn't Apple (Nasdaq: AAPL ) , nor should it try to be. By pricing the new Kindle at $489, Amazon has ceded ground to the Mac maker, which is sure to be fine with pricing a more glossy, more functional, and very likely more iPod Touch-like Tablet later this year.
Amazon, in other words, has forfeited any competitive edge that it might have gained by forgoing an iSized price premium.
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