Bibliophiles who have straddled the fence over buying an Amazon.com (Nasdaq: AMZN ) Kindle now have a $40 incentive to give the electronic book reader a shot. The online retailer is slashing the price of its proprietary device from $299 to $259. Amazon is also rolling out a $279 international version, with access to digital downloads in 100 countries and territories.
This is about to become a competitive market, so it's refreshing to see Amazon attack the upcoming holiday shopping season proactively. Sony (NYSE: SNE ) is hitting the market with a $399 e-book reader that raises the bar with a touchscreen. It's also virtually official that Apple (Nasdaq: AAPL ) will grace the market with a tablet sooner rather than later.
This is the third price cut for Kindle since its introduction less than two years ago. The problem with the serial slashing is that consumers quickly learn to wait. If we go by the Kindle's price-point history -- $399, $359, $299, and now $259 -- patient watchers may just wait to see whether they can pick up a $199 Kindle next year.
Amazon's still waiting for the killer app that makes its Kindle readers indispensable. Hardcovers and paperbacks discounted in digital form are neat, but are they enough to justify the initial investment for avid readers?
The real catalyst could be whether newspapers begin scaling back their print circulation, as Kindle already has digital newspaper deals in place with daily media giants including New York Times (NYSE: NYT ) , Washington Post (NYSE: WPO ) , and News Corp. (NYSE: NWS ) . Even then, Amazon will still have to set its Kindle apart, because no newspaper company is going to settle for e-reader exclusivity.
In any event, daily papers aren't enough to justify the ideal catalyst: newspaper companies that offer fully subsidized Kindles in exchange for long-term subscriptions. Even an aggressive "book of the month" concept would have to lock a publisher into a multiyear commitment to pay off. However, as Kindle prices get cheaper, the subsidized math will get easier to swallow.
If your local newspaper offered you a Kindle for $159 in exchange for a two-year subscription, would you bite? Share your thoughts in the comment box below.