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The $49 Kindle Was The Only Question Not Asked By Charlie Rose

Today, there are virtually hundreds of blogs that have surfaced since last night's interview of Jeff Bezos by Charlie Rose. It was the first news of Amazon's recent launch of their new WiFi and Kindle 3G iterations, and an interesting choice of a TV show to make the announcement. However while Rose's intelligent and pointed Q & A was targeted, it did omit one burning question: What about a $49 Kindle?

The new handheld - to be released on August 27 - is 21 percent smaller and 15 percent lighter than its predecessor, has a 20 percent higher refresh rate on its e-ink (yes, even E Ink) screen, and now in two colors (graphite, as its big brother, DX, and the original white). With the 3G coming in at $189 and the WiFi dropping to $139, the question is Amazon really listening to the marketplace?



While Rose zoned in on all the features where Kindle is presently lacking - namely color, a touch-screen and multi-tasking functionality, when he questioned a lower price-point, he seemed to be satisfied with Amazon reducing the cost on their Wi-Fi model to $139. While that's a significant decrease based on the original Kindles tipping the scales at $300 not to long ago, if Bezos really wanted to shake up the e-Reader market, I believe he needs to take it one step further.

Internet guru and author Seth Godin indicates in his blog, Kindle can become the dominant e-Book reader on the market if not only did Kindle manufacture a no-frills lost-leader at $49, he might also think about giving the device away. Describing a low-end model as the "Paperback Kindle," he suggests a promo that "when buyers purchase 8 bestselling books on the Kindle ($10 each), they get a Kindle free."

While Bezos talked to Rose about not competing head-on with iPad and other tablet devices because people are going to end up purchasing multiple devices for different purposes, he doesn't address how people will be able to afford these items. The inconvenience of carrying around several devices has to be off-set by some kind of benefit to the buyer. A lost-leader pricing promo would do it.

While I am impressed with Mr. Bezos' noble intent and Amazon's mission to become the number globally customer-centric online retailer, I think his resistance to give the same amount of attention to the 'competition' may be his Achilles Heal. A company the size of Kindle can certainly juggle a focus on the customer and its competitors at the same time. One should never displace the attention of one for the other. The trick is knowing when the balance shifts so the brand can improve customer service while not falling behind in sales.

Bezos made it clear that his company does not like to post the number of devices sold. These types of milestones in his estimation provide the competition with too much market information. Again, I think Bezos is missing the mark. If a company like Apple can not only produce an excellent product but is willing to "shout it from the rooftops" while becoming a product leader, it might be wise for Bezos to take their lead.

According to Seth Godin, "the only way to get authors and publishers to embrace this device is to sell 20,000,000 of them." And in regards to the competition, he adds, "the only way to create that footprint in the face of iPad is to make it so cheap to buy and use, it's irresistible."

Kindle may never have made the decision to lower their pricing to $139 - if it were not for the competition. And if it were not for the iPad - we might be still paying $300 for a Kindle today.  So while they're moving in the right direction - a lot more folks would be standing in line - if and when that first $49 model were to roll off the assembly line.

For other posts on Kindle and the e-Book reader market, check out the following:



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Ron Callari
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