Kindles, Kindles Everywhere

Amazon has just announced a raft of new Kindles, including what looks like the first serious challenger to Apple’s iPad, the Kindle Fire. Before the Apple fans start howling me down, let me point out why I think this is the case; it has nothing to do with utility or the OS or how wonderful the iPad is or is not. It’s the price ($199) combined with access to Amazon’s awesome (and, yes, I do use some of them) cloud services. The Kindle is tied to Amazon’s e-commerce platform but that is no bad thing given the library of movies, tv shows, apps, games and ebooks this gives you access to.

In the midst of all this Android-powered loveliness, it is easy to miss another very, very significant point. The cheapest Kindle e-reader, the basic keyboard-less Kindle, is now $79. This is well below the psychologically important $100 barrier. Basically hidden away in this Amazon launch is the fact that e-readers have pretty much just gone mainstream and right in time for Xmas. Coincidence? I think not. I can’t wait for this stuff to hit Europe.

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Comments

  1. I’ve been thrilled about that $79 kindle, but the wave seem to lose its force on its way to europe.

    On Amazon.de (I’m from germany you see) the same new kindle is listed for €99, what kind of shocked me. Considering the exchange rate, I expected it to hit europe for about €58-59 and as you say the psychologically important 100-barrier is still intact over here.
    I see the prize on amazon.co.uk is still below that barrier with £89, which is good, but again the exchange rate would translate the $79 to about £50 and thats quite a difference.

    So even if the kindle is cheaper now, in europe it’s still far away from being an impulse-buy and that is really sad for I hoped the ebook-wave from the US to hit us really hard next year — I planned on starting to self-publish ebooks via amazon and completely ditch the traditional publishers. Guess I will have to think twice about that now.

    The second sad thing about the announcement is that the 3G-version — which would make ebooks pretty easily accessible for not so tech-savvy users — did not get its price cut and is still pretty expensive in my opinion. So gone there is another group of possible ebook-buyers.

    Still waiting for the boom and thankful for your encouraging posts,

    Tim

    • Hi Tim,

      I believe the $79 US version of the Kindle is partially advertising supported. The advertising free version is $30 dollars more expensive and that is the one available in the UK. You can then add in VAT at about 20%. That takes you up to $131 for the basic version of the Kindle. At present exchange rates that is around £84 or €96. It’s higher than the cheapest American price for sure but I don’t blame Amazon for VAT or American advertisers for not wanting to advertise in the UK :). I think Amazon genuinely want to sell these devices. They make their money from selling content and the more Kindles sold the more content they will sell. In the long run, I suspect the price of e-readers is going to fall much further. It is just a case of waiting until it happens.
      All the best,
      Bill

      • Hi Bill 🙂

        I guess my post sounded a little too pessimistic. I already knew about the advertising-screensavers making the kindle cheaper in the US but the publicity over there will kick in a lot stronger than it will do over here. I guess there is quite some impact on our minds if you surf the kindle page on amazon.com and see that shiny 79 — do it in the Euro-paying parts of Europe and you only see the 99 (which is the 100-barrier you were talking of). It will make the difference between insta-buying and reconsidering or at least it could be.

        You know I just hoped for them to tweak it a little further. But now that you did the math, I’m pretty happy that at least the UK got his 89. Let’s hope for the sake of ebook-sales that the kindle will sell a LOT over there 🙂

        And as a sidenote: Later this day I will buy a kindle for my mothers birthday. Recruiting ebookreaders while making people happy is like the two-birds-one-stone-thingy.
        Amazon seems to have done something right there at least to me 😉

  2. Hi Bill,

    You’re right. There is no special offers version available anywhere internationally (including DE and UK), and the prices there (£89 and 99 Euro) are equivalent to the no ads version in the US ($109).

    There is no point in the US partners (people like Verizon and AT&T) advertising in the UK or Germany, and Amazon haven’t set up a program yet with local partners. I imagine it’s coming.

    As for the tablet, estimates are that Amazon is taking a $50 hit on each tablet sold. Their plan is to make this up on content sales and Amazon Prime subscriptions. However, most of that content is US only, so they would lose big if they sold the tablet to international users who can’t then spend on content. I would imagine the tablet will either (a) only be released internationally once the local content is in place (which follows the pattern of the Kindle Stores) or (b) will be released internationally at a premium to cover the shortfall. I vote for (a) but we will see.

    As for me, living in the EU but outside the UK or Germany, the most basic model will cost $170 once shipping, VAT, an adapter, and exchange rates are taken into account.

    Not such a killer bargain anymore, but still the best e-reader for the best price connected to the best store.

    I do wish Amazon had a cheaper shipping option than 2 day international courier which costs around $25. I would be happy to wait a little and get it cheaper (and I imagine many people would feel the same). My hunch is that Amazon doesn’t care too much about markets where the Kindle hasn’t officially launched yet, and is happy to keep them “cool” until they are ready to launch full force so that the markets will pop when they do, and everyone can congratulate themselves on a job well done. I can understand that approach, but I think it leaves room for competitors.

    Dave

    • All excellent points, Dave. I think there is one last thing to take into account. Once manufacturing ramps up, the cost to Amazon will fall. It happens with every form of electronics and there is no reason why this will be an exception. Given the sales I can see Amazon eventually getting from this, there will be huge economies of scale. Not at the start for sure but eventually.

      I would say you are completely correct about their intention of making up the shortfall through content sales at the start. If they are picking up 30% on everything sold on these Kindles, it won’t take them long to do that and Amazon has a history of buying market share anyway. Economies of scale plus huge expansion of market share and sales through that make this potentially HUGE for Amazon. This is a massively ambitious program. I gape in admiration :).

    • P.S. LOVE those covers.

  3. Michael Mooney says:

    I think “hidden” taxes will always lead to misleading prices being quoted – I bought the “special offers” kindle in New York, and the discount was immediately eaten up by sales tax. It still came to around $120 dollars, a good saving on the UK price. I’m quite amazed by how quickly the price of Kindle has come down, and how rapidly Amazon have zoomed in on the precise purpose of the device – it’s a book with near infinite content.

    That’s why I’m a little confused by the Kindle Fire – it’s not an iPad: far too limited for that, and it doesn’t seem to have the Kindle E-ink, which makes it so good as a book. At the price quoted, though, it should hoover up the RIM/HP/Fujitsu offerings, which still makes for a good market.

    • I think Amazon want a content gateway for music and video of the same sort that the basic Kindle provides for ebooks. And I think the Silk browser is probably going to be the biggest data-mining exercise in history so far.

      Think of the Kindle Fire as a big Amazon shop-window you can carry in a jacket pocket and you won’t go wrong. Amazon has a history of buying market share. I think they are trying to built the tablet for the masses and honestly, if anyone can do it, they can. It’s going to be interesting.

      • Michael Mooney says:

        I think you might very well be right. Were the Kindle scores is in doing one thing very, very well and at a good price. If you’re right about the Fire becoming the low cost content browser for video and music, then they’ve found another niche to excel in.

  4. Michael Mooney says:

    Oh, and just off to download “Shadowblood” now.

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