Originally Posted by BillSmithBooks
If Amazon is not working towards this $25 or Free basic Kindle reader, I'd be amazed.
No doubt. But I'm thinking that literally free is off the table.
("Free" with strings, like a book club commitment to buy x-number of books over x-period is a viable option, though.)
A while back TIME did a report on PRIME and how much extra money its subscribers generate for Amazon (a lot!) and the question came up that "If PRIME encourages extra shopping, why not make it free?" and the answer was that when people pay for the membership, they want to get their money's worth. Paying for the product/service brings up an extra urgency to justify the purchase.
The price needs to be low enough to entice low volume readers but high enough the thing doesn't end up unused in a drawer.
I'm thinking that before the readers get much lower than $49 the build cost needs to go low enough the hardware generates a decent margin all by itself, even if it never gets used.
So, while Amazon is no doubt looking at ways to lower the entry-level price of the hardware, there is a magic threshold (maybe $49, maybe $19) below which they won't go, no matter how cheap the hardware gets at the factory side. The subsidized-hardware business is tricky because of the psychology of shoppers. And the ingenuity of hackers.