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As far as I can see, Amazon's DX Graphite and Kindle 3 are the first and only devices to sport the new e-ink screens "Pearl". Amazon buys a significant amount of world e-ink volume. Updates to existing technology are typically cheaper than their parents. It strikes me as possible that, especially given Amazon's volume, it can make Kindle 3s for a lower price than Kindle 2s.
A couple of data points to consider:
• Kobo was released at $149 in May based on much lower volume than Amazon and by a company that had to at least break even
• Bezos has stated repeatedly that the Amazon e-book and Amazon e-reader divisions are run independently and that suggests the e-reader division is expected to turn a profit
I really find it hard to believe that Amazon can't build and sell a WiFi Kindle 3 at $139 and not make a credible margin. To me, that suggests a wholesale build price of $70 to $90. Apple charges a $130 premium on 3G enabled iPads that are identical to their wifi only siblings. Amazon and B&N Nook carry a $40-50 3G premium ... Apple is cleaning up on that option and 3G usage is charged extra!
Analysts are falling all over each other predicting $99 e-ink readers by Q4 2010. That's simply not possible if you believe a $139 or $189 Kindle is being sold "below cost". I believe Amazon is pricing the Kindle strategically and profitably with the intention to grow its own sales and discourage other players from entering the market and encouraging smaller players to exit while they can do so gracefully. If you compare to the frenzy around Android tablets for Q3 / Q4 of this year with expectations of units $99 to $499 from dozens of wannabes and almost every established player ... the e-ink e-reader market is positively pedestrian and rational.
Amazon is a rational company. Rational companies do not sell core products at a loss -- especially when they are the undisputed market leaders. Put plainly with respect to this thread, this WSJ analyst is simply not very insightful.
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