Kindle Christmas: Citi Analyst Predicts Sub-$100 Kindles By The Holidays

Amazon Kindle 3

We could see a $99 Kindle by Christmas, says Citigroup analyst Mark Mahaney. In a research note, Mahaney predicts not only that Kindle and e-book sales will make up 10 percent of Amazon’s revenue by 2012–and that 17.5 million Kindles will be sold this year and 26 million next year–but that Amazon (NSDQ: AMZN) is on track to beat the $100 price point that many believe is key to widespread e-reader adoption by the holidays.

“We would expect a sub-$100 price level by late 2011,” Maheny writes in the note, released yesterday. “Our belief is that the current price levels are attractive enough to broadly expand the potential Kindle buyer base.” The $114 ad-supported Kindle with Special Offers is currently Amazon’s bestselling Kindle.

The report also notes that the Kindle is now sold in many physical retail locations, which could “help drive strong unit sales, perhaps, over ‘back to school’ shopping season.” Kindle has been sold in Best Buy, Target, and Staples since 2010; as of May 2011, it’s also being sold at the over 3,200 Wal-Mart (NYSE: WMT) stores in the U.S.

Finally, the report calls out Amazon’s Kindle TV commercials: “We’re no experts on this, but we view [the ads] as highly effective–simple, sweet, and memorable.”

A price around or under $100, increased retail store distribution, and cute ads could move the Kindle into impulse-buy territory this holiday season. Meanwhile, as Borders prepares to ship its new Kobo E-reader Touch, it’s decreased the price of its second-generation wireless e-reader to $99.99, and Borders is currently offering the original (wired) Kobo e-reader to Borders Rewards members at a price of $59.99 through June 13.

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