via Mashable:
At $114, the 6-inch device costs $25 less than the current Wi-Fi-only model and sports all of the same specs. The catch? Users will have to bypass the occasional special offer and look on sponsored screensavers from the likes of Buick, Olay and Visa when their devices are idle.
- Kindle w/ Special Offers (wi-fi) $114
- Kindle (wi-fi) $139
- Kindle (wi-fi & 3G) $189
- Kindle DX 9.7″ (wi-fi & 3G) $379
Confused?
Assuming that each book takes 6-10 hours of continuous reading to finish (sometimes more), Amazon thinks that your eyeballs seeing an ad each time you pick up a Kindle is only worth $25 for the 12-18 months that you’ll own a Kindle and use it. Really? Amazon was only able to extract $25 per user in subsidization by delivering ads to a reading device that requires hours of activity once you’ve purchased a book? Are people using Kindles that little or is Amazon just really bad at making any meaningful profit on these ads?
At $139, I’d bet Google could subsidize the ENTIRE purchase price of a Kindle with advertisements making the device free and Amazon continues to make profits on book sales once the device has been purchased.
TheTechnium blog figured that, by this time, the price of a Kindle would be free. I assumed the same (via John Gruber)
Instead of doing something groundbreaking in allowing, for example, every Prime member to get a free Kindle that is subsidized with ads or at least a nominal price of $9.99 (to reduce the amount of people who just get one because they can), they release a Kindle priced $25 less with the only drawback being you have to see an ad when you pick it up.
People will buy this but, for me, $25 isn’t worth seeing ads. If I were in the market for a Kindle, I’d still be buying the $139 model because an advertisement isn’t worth saving the money equivalent to the price of a dinner at my favorite sushi restaurant.
Good job Amazon.