After testing sales of Amazon's Kindle e-reader in 100 Florida Target stores earlier this year, Target began selling them on June 6 in all of its 1,740 stores throughout the U.S. And now, in yet another bold move, they've cut the price on the device by $60.
Target has been selling Kindles for the same price as Amazon does online, $259, and will no doubt drop its price to $189, too.
The surprisingly strong sales of Apple's newest glittery toy, the iPad, as well as price reductions on the Kindle's strongest apples-to-apples competitor, Barnes & Noble's Nook e-reader, has put pressure on Amazon to expand marketing beyond its own web site and match its main competitor's pre.
Kindle's new price point, $189, is no doubt a reaction to Barnes & Noble's announcement that it is cutting the price of the similarly-featured Nook 3G to $199. The price, more than $300 cheaper than an entry-level iPad ($499), should draw the platform at least a little more attention, although it's bound to tick off those who just paid the original price for their Kindle.
The real long-term struggle, however, is not going to be about the device, but rather the content. Rumors at the time of its release suggested that Amazon was losing money with each Kindle sold, but anyone with marketing savvy could point to the real profit-maker: sales of e-books.
The intended business model can best be illustrated by Apple's success with iTunes, which became the dominant retailer of music by giving iPod owners no other choice but to buy music from its online store. Amazon, Borders and Barnes & Noble have surely laid plans to carve out a similar niche for themselves in written entertainment, but so has the formidable Apple with its iPad.
The e-reader field is not evolving the same way the music industry did, though. One can get a Barnes & Noble Nook app for the iPad, for example, as can Blackberry phone readers. The ability to limit a reader by their device to a specific bookstore doesn't appear to be working, as hard as Amazon is trying.
Many thought that the Kindle's primary advantage would be its electronic ink technology, which, since it doesn't depend on back lighting, would be so much easier on the eyes that readers would prefer it to something like the iPad. Feedback to date from iPad owners, however, suggests they are perfectly happy reading on that platform.
Without that advantage, the Kindle faces a serious lack of sex appeal. The black and white screen of the Kindle looks like an antique from the 1970's beside the larger, sharp-color screen of the iPad and the numerous clones soon to hit the market. The Kindle's inability to serve as an acceptably fast internet browser also makes it seem primitive.
The competition is only going to get stiffer from here. Look for cell phone companies to push a variety of iPad-like devices at lower prices (when linked to a multi-year plan, of course).
Given the frantic rate with which computer makers are struggling to finish iPad-like devices, and the cell phone vendors interest in pushing them, the window of opportunity for Target to make a good chunk of cash off of the Kindle is slim. This would have been big news a year ago. Before the age of the iPad began.
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