Amazon has pointed to the Kindle (left) as a growth driver and said sales have surpassed expectations, without disclosing sales or profit data. -- PHOTO: AFP
SAN FRANCISCO - ONLINE retailer Amazon.com has cut the price of its standard Kindle electronic reader by 17 per cent to US$299(S$438), the company said on Wednesday, the latest salvo in the war for digital readers.
Digital vending machine
"(It's) growing economies of scale or perhaps Amazon is seeing that consumers are buying enough content where it can further subsidize the device," Mr Rubin said, adding that Amazon has a "greater than usual incentive" to knock US$60 off the price.
"It's essentially selling a vending machine into consumers' hands," he said.
The price cut comes amid a budding digital book battle where rivals like Amazon, Sony Corp and a host of smaller companies are anxious to get in on the ground floor of what some say is the future of reading.
Amazon said customers who had ordered Kindles that had shipped within the past 30 days would receive a US$60 credit on the price difference.
Electronic readers allow consumers to read books, magazines or newspapers on a tablet that downloads content digitally. While the devices are convenient for those who travel and embraced by avid readers on the go, their high prices have been a barrier to many.
"While it is a significant drop both in terms of the overall percentage of the price as well as getting under the US$300 barrier, it is still not going to be enough to break it out of its niche," said Mr Ross Rubin, consumer technology analyst at the NPD Group.
In February, Seattle-based Amazon unveiled the second version of its digital book reader, priced at US$359. The first, which debuted at US$399 but whose price was later reduced to US$359, came out in November 2007 amid much fanfare.
Amazon has pointed to the Kindle as a growth driver and said sales have surpassed expectations, without disclosing sales or profit data.
A spokeswoman said Amazon was able to cut the price of the Kindle as higher volume had reduced manufacturing costs.
The value of the Kindle for Amazon is in the content purchased by users of the e-reader, analysts say. The retailer charges US$9.99 for most bestsellers digitised for the device.
Tuesday's price reduction could be attributable to a number of factors, said Mr Rubin. -- REUTERS
