Blog Post

Amazon Hopes Less is More With New Kindles

Amazon (s amzn) is riding the wave created by high Kindle e-book sales and releasing two new Kindle readers. The Wi-Fi model is only $139, and the 3G-enabled Kindle is $189. Both new Kindles have the same 6-inch screen, improved to provide 50 percent better contrast for reading that is easier on the eyes. Even though the screen size is the same as the previous Kindle, the new models are 21 percent smaller and only weigh 8.7 ounces.

The improved screen may be a bigger draw for consumers than the smaller size, as Amazon claims the new technology makes fonts crisper and much easier to read. Pages also turn faster, addressing a common complaint by users of electronic readers.

Amazon is expecting these new Kindles to trigger higher sales due to the reduced pricing.

“Kindle is the best-selling product on Amazon for two years running.  We lowered the price to $189 and sales growth tripled.  Now, we are excited to introduce a new generation Kindle that is smaller, lighter, and faster, with 50 percent better contrast.  Readers are going to do a double take when they see Kindle’s bright new screen and feel how remarkably light the smaller 8.7 ounce design feels in one hand,” said Jeff Bezos, Founder & CEO.  “If you don’t need the convenience of 3G wireless, we have an incredible new price point—$139 for Kindle Wi-Fi.  Kindle Wi-Fi has all the same features, same bookstore, same high-contrast electronic paper display, and it’s even a tiny bit lighter at 8.5 ounces.  At this price point, many people are going to buy multiple units for the home and family.”

Amazon has not disclosed the profit margin on the Kindle readers, and these low-cost readers must be approaching the subsidized range if they aren’t there already. The profitability is likely in the selling of content, so it’s possible these cheaper readers could be selling as a loss leader for Amazon. The electronic reader space is heating up, with Amazon’s competitors also offering devices with similar capability. Are we heading for the eventuality of Amazon giving free (or almost free) Kindles to customers?

If we are, it could be a result of fending off the competition. Barnes & Noble (s bks) is selling a Wi-Fi version of its Nook reader for $149, so Amazon is going after the Nook with its cheaper Kindle. On the high end, there’s competition from Apple’s (s AAPL) iPad, which is a more general purpose device, but also a platform.

In response to other devices — such as smartphones –offering a reading platform, both Amazon and B&N have built the readers into full-blown platforms, with versions of the two reader apps available across multiple operating systems and devices. The winner of the e-book wars will likely be the company that builds the biggest ecosystem for consuming content, and Amazon is already doing a decent job in that area. While electronic readers are important as the primary marketing platform for the seller’s content, they represent only a fraction of the prospective target devices that can consume the content due to these reader apps.

Amazon’s recent disclosure that a big jump in Kindle content sales occurred may have more to do with the release of the iPad than with sales of the Kindle reader. The company had the free Kindle app available for the iPad on the day it launched, and it may not be a coincidence that Kindle book sales jumped at that time. The company will not disclose what percentage of Kindle books sold are for devices other than the Kindle reader. There are currently over 100,000 customer ratings in the iTunes store for the Kindle app, so it’s almost certain iPad owners are buying Kindle books without a Kindle reader in hand.

Customers can pre-order the new Kindles immediately, with shipping to begin on Aug. 27.

Related research on GigaOM Pro (sub. req’d): Irrational Exuberance Over E-Books?

20 Responses to “Amazon Hopes Less is More With New Kindles”

  1. So…. this Christmas I could buy 4 or 5 Kindles for the cost of one computer tablet? Hmm. That’s interesting isn’t it? Stick with your computer, screw the tablet market, and buy a ereader instead. In other terms, buy a netbook or ulv laptop plus a Kindle and still have enough money left over to buy a Happy Meal. Or, you could just buy a tablet (iPad) and fork over even more money for a less productive device. A device that would actually require you to buy a keyboard so that it matches the usefulness of the ereader and netbook/laptop combo. I’ll take a netbook on my travels over a tablet anyday. The Kindle is so small anyways you could just slip it in the sleeve for your netbook. Put em together and you still saved yourself a bucket full of money. Tablets imo are a lose/lose proposition.

    • Thanks for the advice, but I’ll stick with my iPad, which is seeing more use than my notebook these days. As an independent tech consultant I’m basically on call 24/7 and have to be prepared to access a server, review a document, join a WebEx meeting, or any number of other things at any time. The Kindle obviously can’t do everything I need, and there are many times/places I wouldn’t take, or open a clamshell-style computer. With the iPad I have all the tech tools I need, plus all the books and other entertainment. See my blog for more on how I use the iPad primarily for business.

      I think the Kindle/Nook single purpose readers will soon be given away free, in which case a lot of them will be distributed, and therefore ebook sales will continue growing. Anyone spending money on a tablet-style device will want a fully featured iPad or Android device.

  2. The Kindle doesn’t need another PC to work, to load, or save content. I do wish it had ePub reading capability, though. I’m probably going to order one.

  3. Does anyone know what the physical overall size is?
    (6″ x8″?)

    Does it have a USB port to load your files directly onto it without having to hook it to your computer?

  4. Richard Garrett

    Who will buy Kindles? I purchased a Kindle as a gift for my mother who is definitely phobic about computers. Three weeks in she seems to be using and enjoying it. Meanwhile I use the Kindle reader on my Moto Droid and iPad. Multiple platforms is a definite plus as far as I’m concerned.

    • Perhaps someday, especially for a person who reads only occasionally. For heavy readers, however, an e-reader like the kindle is great. I suppose you could say the same thing about any media, like music or video. Sure, you can do it pretty well on a phone, but when you really want to enjoy a particular media, you want a device made for the purpose.

      • Ageed,

        I read a lot of kindle content on my iPhone, but only when the kindle is not with me. I doubt I would read much on my iPhone if it didnt sync back to my kindle.

    • Phones are always with you because they are small enough to be inconspicuous. Anything that size is too small for most of us to stare at for hours of reading books, and will never match a larger device for the pleasure of browsing magazines and newspapers where page layout is important.

  5. G Hornet

    Being able to improve display that much shows just how bad the previous models really were. A lot of people now have the word SUCKA firmly embedded on their forehead.

    This whole “easier on eyes” is a crock-o-sh*t as LCD, Super LCD, OLED, AMOLED, Super AMOLED all can be used for hours a day without any eyestrain, this is nothing but marketing spin and should be dismissed accordingly.

    I am still looking forwarded to the publishers new eBooks that take full advantage of iPad and will be colourful, multi-media enhanced and interactive all features the Kindle cannot come close to providing. Keep checking the iBookstore cause they are a coming and hopefully they will once-and-for-all make the Kindle obsolete overpriced scrap heap material.

      • While that’s true, I’m not certain that differences in battery life actually sway many consumers once you exceed 8-10 hours on a single charge. Very few people will use a device for longer than that in circumstances where they can’t charge it easily. Anyone know of any survey data on this particular topic?

    • Some people prefer not to read extensively on backlit devices. That is where “easier on eyes” comes in to play. Also, the previous models’ displays are not bad, if they were, why would so many people have bought them?

      Additionally, size and weight may be a factor for many people. The modern ereaders weigh about the same as a paperback novel and are physically close in height/width. The iPad, at 1.5-1.6 pounds and nearly the same size as a piece of printer paper, is about 3 times as heavy and not as portable.