E-readers, tablets and other mobile devices are upending the traditional print industry, which suits Amazon just fine, because of the Kindle. Currently, Amazon has a 60 percent market share in the e-reader market, a hold that should increase as the $114 Kindle with Special Offers hits the market next month. What’s the catch? The new Amazon Kindle, while no different from the Kindle 3 in most respects, can be ad-supported. Article source – Amazon to release ad-supported Kindle for $114 by MoneyBlogNewz.
Putting advertisements on a kindle; pay less
The price of the Amazon Kindle has fallen a few times since the first generation was introduced at $399 in 2007. The price deduction never included advertisements before this. Doing this, the e-reader market can be breached making the iPad competition. The Kindle with Special Offers is slated to ship May 3. The Kindle 3 can be put in stores then. Both Best Purchase and Target will carry it.
It is “chicken in every pot” decision made with the $114 kindle with Special Offers according to Jeff Bezos, the Amazon CEO and founder:
“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 ad-based Kindle. The price of books was brought up by one reader that says kindles for free with ads would be okay with $0.99 books. The $25 discount isn’t enough, according to some readers. Most experts’ say it is okay though since the ads only come up on the bottom of the home screen and on the screen saver.
“It’s very important that we didn’t interfere with the reading experience,” Kindle director Jay Marine told the Associated Press.
Why every person worries about a price
TechCrunch predicts that the $114 Amazon Kindle with Special Features is an intermediary step toward a $99 Kindle for Christmas 2011. 99 is a magical number. Most marketing would suggest this.
The Columbia Business School in New York did research on this though. It showed this is probably not the case 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. Dollar plus brands seemed less manipulative to customers which is why the dollar plus method sold 3 percent more.
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
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