Quote:
Originally Posted by WalkingDistance
I'm not sure about the $99 price point you guys are suggesting. Yes, it would get rid of the psychological block for consumers, but will the ads alone be enough for Amazon to get back that $40?
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I don't know if they'd get back the $40 from ads alone, but I think they'd sell a
lot more Kindles at $99 than they would at $114, and I think that's the upside for Amazon. Selling more Kindles means selling more e-books.
Let's say (and I'm picking a random number) that every Kindle owner buys 15 books a year. Let's further assume that those are all $10 bestseller-type books.
10 Kindles at $1140 + 150 books at $10 = $2,640.
Now, let's say they sell just 2 more Kindles if they charge $99 for them:
12 Kindles at $1188 + 180 books at $10 = $2,988
That's a 13% increase. And that's a pretty modest Kindle sales increase, compared to what would probably happen. A $99 Kindle would get a
lot of people up off the fence.
I think the math would work out pretty well for Amazon.