Kindles for free: a report from the future

FARHAD MANJOO - -  05/09/2012

OPINION: My record on predictions about Amazon is mixed at best. Two summers ago, I guessed that "before the holidays", Amazon would cut the price of its cheapest Kindle e-reader to US$99. My logic was solid - the cost of the Kindle's parts kept declining rapidly, and Jeff Bezos, Amazon's chief executive officer, seems to be happiest of all when he's slashing prices - but my timing was off. Amazon's cheapest Kindle didn't break the $100 barrier until last year, when the company lowered the price to $79.

Being wrong doesn't deter me, though, so last month I reported on another vision in my Amazon crystal ball. The company was moving toward offering same-day shipping to people in large metro areas across the country, I said. But a few weeks after my piece, Tom Szkutak, Amazon's chief financial officer, pooh-poohed the same-day shipping plan during a call with stock analysts. "We don't really see a way to do same-day delivery on a broad-scale economically," he said.
To me, that sounded like a bluff meant to throw off competitors. Amazon already offers same-day shipping on select items in 10 American cities, and shipping things faster has always been one of its primary corporate missions - that's why it's building dozens of new shipping centres across the country. I'm still sticking to my guns - I believe that over the next few years, Amazon will offer same-day service on more items in more places.
Keep that record in mind when you hear my next report from Amazon's future. Next week, the company is holding a press event in Los Angeles to introduce some new stuff. Many observers believe we'll see upgrades to the firm's Kindle line-up. These include, according to AllTh-ingsD, a new Kindle Fire that has a camera and a better display and, per TechCrunch, a "front-lit" E Ink Kindle, meaning one that you can read at night. If that's the case, I'll be ecstatic. But what about the entry-level Kindle, the model that now sells for $79? It seems certain that Bezos will lower the price of that device once again. The question is, how low will he go? I think the Kindle will drop to around $55; Amazon's last price drop shaved 30 per cent off the Kindle, and with the price of parts still falling, I think it could stomach a similar drop again.
But let me go out a little further on that limb. I wouldn't be surprised if Amazon drops the entry-level Kindle much lower than $55 - all the way down to free, with a catch. The catch is that you'd have to pay for Amazon's Prime membership service, which goes for $79 per year. In addition to free two-day shipping on 15 million products, Prime gives you free streaming movies and access to a "lending library" of Kindle books. Now if you sign up to Prime, you'd get the Kindle itself free, too.
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