Amazon Lowers Price on Kindle eReader
Amazon dropped the price of its Kindle 2 e-reader to $299 from $359 with little fanfare, though it suggests Amazon hopes a $60 price cut will make the device more attractive in an increasingly competitive market.Online retail giant Amazon quietly dropped the price of its heavily promoted Kindle 2 e-reader today, lowering the price to from $359 to $299-a $60 cut. Amazon issued no release announcing the price reduction, fueling speculation that the nascent e-reader market isn't reaching enough of an audience. The Kindle 2, which debuted in February with the help of celebrity horror author Stephen King, is the successor to Amazon's original Kindle reader. Amazon spokeswoman Cinthia Portugal told The Associated Press the price cut was a permanent move rather than a promotional stunt. "We've been able to increase the volume of Kindles we're manufacturing and decrease the cost of doing so," she said. Although Amazon does not release shipping numbers, reports have stated that some 300,000 Kindle 2 units have been shipped by mid-April, nearly matching estimates of 400,000-500,000 units shipped for the first Kindle version.
A recent teardown of the manufacturing process by market research and consulting firm iSuppli Corporation revealed Amazon spends $185.49 on every Kindle 2. Some 41 percent of the materials cost comes from the Kindle 2's $60 E Ink Corp. display module, which supports 16-level grayscale images.The price does not include the licensing costs for using the ARM processor or the costs of intellectual property, royalties, licensing fees or elements such as software loading. In June 2008, iSuppli issued projections of e-reader sales for the year 2009. The report predicted "enormous growth" for the market this year, with 3.5 million e-readers sold.