Amazon Drops the Price of the Kindle 2 to $299

By Leena Rao

It looks like Amazon (AMZN) had dropped the price of the latest generation Kindle 2, the 6-inch reading wireless reading device, from $359 to $299. I’m actually kicking myself right now because I just purchased the same one for the higher price a few days ago.

It’s unclear why Amazon dropped the price. Sales don’t seem to be a problem, as it appeared sales for the latest generation Kindle are growing. As of April, sales of the Kindle 2 were apparently selling at roughly double the rate of the first generation device. According to a source close to Amazon, approximately 300,000 of the Kindle 2s had been shipped as of mid-April, suggesting Amazon has made over $100 million in revenue from sales of the $359 device alone this year.

Amazon officially unveiled the Kindle 2 in February. Besides being smaller and sleeker than its older brother, the Kindle 2 has a longer battery life and 7 times the storage. Amazon dropped the price of the first generation Kindles to $299. But why would you buy the old version for the same price as the new, smaller one? The Kindle DX is still priced at $489. We first broke the news of the Kindle 2 and the large screen Kindle last fall.

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Comments

[Roger Knights:]

"It’s unclear why Amazon dropped the price."

Maybe they want to lower the price umbrella on potential competitors.

Jul 08 10:32 PM

[PlainJane:]

Two competing products - the reader from Plastic Logic and Hearst's FirstPaper - are preparing to launch. I believe Amazon is making a preemptive strike.

Jul 09 12:09 AM

[Spook:]

My thought on this. Last Friday, Prime View International (元太), provided a routine business update, second quarter is strong, but the key information is their projection of a strong EBook reader business in third quarter this year.

For those who may not be aware on what I was talking about, Prime View International is a Taiwan publicly listed company, who acquire E-Ink Technology last month, Prime View is also known to build Amazon Kindle and Sony EBook Reader. Taiwan public company are require to provide report to Taiwan SEC before every 5th of the month.

Prime View stock went up these few days as investor is anticipating a strong third quarter and possible strong EBook business.

Which to my translation is, Prime is gearing to build a lot of EInk for EBook use, they are the first of the supply chain to see how this business will be, next to see an increase in business is the system supplier as Taiwanese call them, in your term is the OEM vendor, finally follow by a pick up in business from companies like Amazon, Sony or Hanlin, unless Google join the fray.

Back to the subject, Amazon may be anticipating a surge in supply, in order to accommodate this supply without incurring high inventory, Amazon will need to drop the price of the 6 inch EBook.

Jul 09 03:52 AM

[skysan:]

What they should have done was fall in-line with Sony and drop the price as soon as they introduced the Kindle DX. I imagine that they are going to have fire sales on the original as it is priced the same as K2.

I currently own a Sony PRS-505 and think it is great for my needs. Being able to download content that is not tied to Amazon is what drove me to purchase it. I had many tech books that also had a PDF and the original K would not let you import or it was very difficult to use.

Jul 09 01:41 PM