November 24, 2010

Amazon slashes Kindle price for Black Friday


People have been predicting for a while that, in the accelerating war over ereaders, Amazon would eventually do what it does and simply gut the price of the Kindle. Even though the first generation Kindle — meaning, not that long ago — cost $399, many thought the company would eventually cut prices to as low as $99. For example, back in August Farhad Manjoo wrote in a Slate column:

I rarely make predictions about the tech business, but here goes: Before the holidays, Amazon will cut the price of the Wi-Fi Kindle to $99, and the 3G version will go for $150 or less. Amazon will do so, I think, not only to sell a lot of Kindles but also to cement its online store as the iTunes for books the dominant force in the publishing business for the foreseeable future. A $99 price tag will make the Kindle the hottest gift of the season much cheaper than the $499 iPad, more useful than an Xbox Kinect, and a lot more fun than a cable-knit sweater.

Well, the prognosticators were wrong: They’re cutting the price by more than that.

As David Carnoy reports in a CNET News story, yesterday the company announced on its Facebook page that it would be selling Kindles for $89 on Black Friday.

The message, in its entirety, read:

Black Friday Deal: This Friday, 11/26, you can get our previous generation Kindle for $89! Our previous generation Kindle uses the old E Ink technology (the same E Ink as in the current Nook). Our all-new Kindle uses the latest generation E Ink (Pearl) for 50% percent better contrast, and is available at the everyday low price of …$139.

Okay, so its “previous generation” left-overs only, which the company would obviously love to sell through to get to newer models, but it still might prove to be a loss leader at that price. But Amazon isn’t about profit, after all — they’ve never made one — it’s about massive cash flow and even more massive market control.

And that last, of course, seems the most obvious goal with this move: Note the announcement’s snarky comment that its “old” e-ink technology is the same as what’s used in the “current” (i.e., new) Nook, which costs $149.

Meanwhile, who’s to say Amazon doesn’t have more holiday discounts — such as the one predicted by Manjoo for newer models — yet to come?

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him on Twitter at @mobylives