Putting ads on a kindle; pay less
The first generation Amazon kindle in 2007 cost $399. This is the first time, however, that a price reduction will consist of the placement of advertisements on the popular e-reader, a move geared to capture ground from the iPad in the e-reader market. The Kindle with Special Offers is slated to ship May 3. Target and Best Purchase will sell the ad-supported version of the Kindle 3 in stores at that time.
Founder and CEO of Amazon Jeff Bezos state it is a "chicken in every pot" move. Every person will want the Special Offers $114 kindle:
"We're working hard to make sure that anyone who wants a Kindle can afford one," he said via a statement.
Reader response to a Christian Science Monitor article about the price cut seems to echo the fears most customers have about an ad-based Kindle. One reader argues for a free advertisement-based Kindle with $0.99 books, but that reflects another thorny issue concerning the price of electronic books. Many experts say it is good that Amazon only has advertisements on the bottom of the home screen and on Kindle's screensaver, although some complain a $25 discount is not enough.
"It's very important that we didn't interfere with the reading experience," Kindle director Jay Marine told the Associated Press.
Why everybody worries about a price
TechCrunch predicts the $114 Amazon Kindle with Special Features is an intermediary step toward a $99 Kindle for Christmas 2011. 99 is a magical number. Most marketing would suggest this.
The Columbia Business School in New York did research on this though. It showed this is probably not the case anymore. A dollar plus approach, adding a penny, was more effective than the dollar minus approach, taking a penny away. The Columbia study showed this clearly. There was a 3 percent increase in sales of dollar plus method goods. This is because they didn't seem as manipulative to customers.
Christian Science Monitor
Columbia Business School
Knowing and Making
Kindle sales tripled after last price drop
Resource for this article - Amazon to release ad-supported Kindle for $114 by MoneyBlogNewz.
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