Kindle's price drops--well, of course it does

The big news in the ereader world is that Amazon.com dropped the price of the Kindle 2 from $259 to $189 after Barnes & Noble lowered the price of its comparable Nook from $259 to $199.

While Kindle/E-Ink haters immediately pounced on this move as a sign that the Kindle is nearing death (“Kindle price drop–Too Little, Too Late“; “Kindle, Nook and Vizplex eReader devices face mass extinction“), one has to remember the earlier columns from such writers, which included this image:

Apple’s much-ballyhooed introduction of the iPad was months ago and, despite its commercials’ (and Mr. Jobs’) assertions, the iPad has not “revolutionized” the world.  In fact, Mr. Bezos has defiantly made a stand by announcing that the next generation Kindle would remain a black & white, standalone ereader.

Last month, Bloomberg reported that Amazon would be releasing the next generation Kindle as soon as August.

So, Amazon has bid its time–knowing that it would have to drop the Kindle’s price before officially announcing the newest Kindle–but did respond when Barnes & Noble made their price cut. Amazon is definitely interested in keeping its domination over the ereader market.

Note that Barnes & Noble was only able to sell its Nook at $259 for less than 7 months and now will have to recoup its research & development costs at the new $199 price.

Conversely, Amazon sold the Kindle 2–which most estimate to cost between $90-125 to manufacture–for $359 for 5 months; $299 for 3 months; $259 for 8.5 months; and now, $189 until the Kindle 3 is released.

The ereader is not dead–it just behaves as any market that starts to mature.

Do you remember how much your first mp3 player cost?  Apparently, the tech media have forgotten.