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Originally Posted by fjtorres
If Amazon wanted to lose money on Kindle hardware sales as a means to ramp up ebook sales, the time to do it was early in the game when the biggest complaint was that dedicated readers were too expensive. Yet the Kindle2 was introduced with a 100% markup. They could have easily cut $100 off at that time and *still* made decent money. Instead, they went with market-based pricing instead of loss-leader pricing.
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They didn't
need to do so. They had a far bigger already existing incentive: breadth of content offered. Amazon had (and has) far more books available in electronic form than their competition, with pricing that was attractive, and ways to suggest books that weren't available in electronic form that ought to be. ("I'd like to read this book in a Kindle edition") Amazon's breadth of content and attractive pricing made customers willing to accept vendor lock-in. If they could get any book they wanted for the Kindle at an attractive price from Amazon, who
cares that they can
only buy from Amazon?
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Nothing that has changed since gives any hint that they *what* to get in a race to the bottom; their recent price cuts were reactive and measured. If anything, the last update makes it clear they intend to add value to the readers via Whispernet and social networking features. That pretty much rules out an unconnected Kindle.
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I concur. Amazon has no need to race to the bottom.
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Anyway, when it comes to cheap Kindle delivery systems, smartphones and Tablet PCs will fill in the gaps quite nicely so Amazon can bide their time and focus on their dedicated reader gadgets. The recent release of Kindle for Android is particularly well-timed as it appears to run fine on the Pandigital Novel, which runs brings color LCD reading to under $149. That means yet another platform (webpads) to prop Kindle up.
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Does it indeed? I've been watching Android with interest, because there's no particular reason why what it powers needs to be a smartphone. There are several ARM processor based netbooks in development, with Android as the OS, and Android includes touch screen support.
I suspect the release of the Android port was largely prompted by the success of the Motorola Droid, but the Droid is just the tip of that particular iceberg.
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There's lots of ways to build installed-base volume that don't involve giving Kindles away. Though they *have* considered it. Do notice they haven't done it...
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Like I said previously, why should they? Amazon wants to make money. They have no need to lose money, or even reduce the amount of money they
do make to increase market share.
I'm sure lots of folks would like a $99 Kindle. Okay, I know what's in it for them - a much cheaper Kindle. What's in it for Amazon? "Not enough" or "nothing", so it's unlikely to happen.
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Dennis