Amazon to release ad-supported Kindle for $114

E-readers, tablets and other mobile devices are upending the traditional print industry, which suits Amazon just fine, as a result of the Kindle. Once the $114 Kindle with Special Offers ships May 3, Amazon should improve its 60 percent share in the e-reader market. What is the catch? The new Amazon Kindle, while no different from the Kindle 3 in most respects, will be ad-supported. Article source – Amazon to release ad-supported Kindle for $114 by MoneyBlogNewz.

It is worth a price reduction for an ad based kindle?

About $399 was spent in 2007 on the first Amazon kindle. The price has gone down a lot since then. To be able to try and compete with the iPad in the e-reader market, the advertisements were put on it this time in the price deduction. The Kindle with Special Offers is slated to ship May 3. Target and Best Purchase will sell the advertisement-supported version of the Kindle 3 in stores at that time.

Founder and CEO of Amazon Jeff Bezos claim 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 consumers have about an advertisement-based Kindle. With 99 cent books, one reader would be okay as long as the ad based e-kindle was free. The price of books becomes a different issue then. Another reader concurs that a $25 discount isn’t enough to make up for the presence of ads, but one thing experts believe Amazon has done right is to isolate the ads to the Kindle’s screensaver and the bottom of the home screen.

“It’s very important that we didn’t interfere with the reading experience,” Kindle director Jay Marine told the Associated Press.

Price matters

The guess TechCrunch has is that the $114 Amazon Kindle is just leading up to the Christmas 2011 $99 Kindle. According to traditional marketing, 99 is magical number.

However, new research from New York’s Columbia Business School indicates that the advantage is more imagined than it is real 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. Sales of goods that used the dollar-plus method increased by 3 percent, and customers felt greater trust for dollar-plus brands since the prices were perceived as being less manipulative.

Citations

Christian Science Monitor

csmonitor.com/Books/chapter-and-verse/2011/0413/Will-readers-accept-ads-in-exchange-for-a-cheaper-Kindle

Columbia Business School

gsb.columbia.edu/ideasatwork/researchbriefs/7314376?&top.region=main

Knowing and Making

knowingandmaking.com/2011/04/new-research-99-no-longer-optimal-for.html

TechCrunch

techcrunch.com/2011/04/11/amazon-kindle-99/

Kindle sales tripled after last price drop

youtu.be/PaAFm_fZQ2A