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Bargain Basement Kindle: Amazon Offers $139 Model
Thursday, July 29, 2010

It is a race for the bottom when it comes to e-reader pricing, ironically now with Amazon taking the lead. The maker of the category-defining Kindle announced this morning that it was refreshing its $189 Kindle with a new hardware model and introducing a bargain basement $139 Kindle WiFi model. The new base model Kindle with 3G boasts a new screen that claims 50% better contrast than competitors, a 21% smaller body and 15% lighter weight (8.7 ounces). The screen is supposed to be more responsive as well, with 20% faster page turns. Storage capacity has been doubled as well, for those who really want to carry 3,500 books along with them at a time. This revised Kindle continues to include the 3G wireless service that allows for downloads anywhere there is cellular service.

But the more important news involves the low end. Amazon breaks the $149 pricing set by some competitors in the space with a new model priced at $139 that does not include 3G and works only over WiFi. The Kindle WiFi. This model seems to use the same basic hardware as the revised Kindle but comes in at an ultra-low price. In a deal with AT&T, the Kindle WiFi will get free access to WiFi hotspots around the U.S. Both models will begin shipping at the end of August.

Amazon’s defensive maneuver suggests it is feeling the heat not only from the Apple iPad but from the recent price cuts and new models in Barnes & Noble’s nook line. The danger for Amazon is that the e-reader becomes a commodity whose models are indistinguishable from one another. Since Amazon is sticking with its basic stripped down hardware approach for now, the Kindle soon will find itself in a field of tablet readers that are considerably cheaper than the iPad but sport color screens and the flexibility of the Android operating system. Until Amazon rethinks its hardware model, the Kindle looks and feels so much like the competition now that the bookseller has to differentiate itself with small tweaks and price cuts.

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com

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