Amazon lowers Kindle to $299; local author approves

Amazon has slashed the price of Kindle to $299. Bloomberg.com announced on Wednesday that Amazon marked the e-reader down from its previous nosebleed height of $359 because of, in the words of spokesman Drew Herdener, “higher volume.”

This is entirely different fanfare from February of this year, when Amazon debuted Kindle 2. Despite the sleeker design, longer battery life, and more storage than its predecessor, the $359 price tag remained a sticking point for the consumer. Even Germantown author Karyn Langhorne, with two of her five books available as Kindle editions, couldn’t bring herself to loosen up the purse strings. In a previous interview, Langhorne explained why:

My magic number is under $300. The lower it [Kindle 2] goes under $300, the sooner I’ll get one. I’ll even get two. When the price drops, the people on the fence, like me, are going to buy it in droves.”

Langhorne’s complaint was typical. Sarah Rotman Epps, an analyst at the Cambridge, Massachusetts firm Forrester Research Inc., called the old Kindle price “unsustainable,” adding, “It was just a matter of time before they dropped prices.”

Langhorne’s reaction to Amazon’s decision to knock $60 off the price of Kindle: "Hello, birthday present!"

Amazon’s reason for the about face? That “high volume” that Herdener talked about preceded this party line: “Whenever we are able to create cost efficiencies like this, we pass the savings along to our customers.”

However, because one rarely sees the combination of corporate behemoths and magnanimity, one must search elsewhere for reasons for the shift. Here are three of them:

• Competition. Sony’s e-reader is still a formidable threat and commands a portion of the market share (see Battle of the e-book readers: Kindle 2 vs. Sony Reader).
• Popularity. According to Bloomberg.com, “While Amazon.com doesn’t disclose Kindle sales, the device has been a popular Christmas gift, selling out the past two holiday seasons.”
• Profit: Bloomberg.com quotes Sandeep Aggarwal, an analyst at San Francisco’s Collins Stewart LLC, who says, “By 2012, Amazon.com will make more than $2 billion in annual revenue from the Kindle and related content.”

Just as the analyst Epps talks about the inevitable change of unsustainable price points, Langhorne the author examines this latest development through a historical lens:

Actually, this is, of course, just like any new technology: computers, cell phones, the iPod and iPhone. Eventually, the price drops to a point that more and more people can afford… Then they become ubiquitous, and we can't imagine how we lived without them. Kindle's no different. There was once a time when books were expensive to produce and few people had them. Gutenberg changed that, of course. I guess Kindle is the new printing press and soon there will be nothing novel at all about them. They will dramatically change publishing in the same way the printing press did: by making more information available to more people, cheaper and faster than ever before.

Langhorne may be right. However, in terms of Kindle, change is selective. Kindle DX, aka SuperKindle, sells for $489. That price, for now, will stay put.