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Amazon’s Curious Move to Roll Out an Ad-Supported Kindle at a $25 Discount

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By HVculture on April 12, 2011

Amazon has announced that starting May 3rd, the company will offer an ad-supported version of its popular e-reading device for a scant $114, according to Market Watch.

“The new Kindle will feature special offers and sponsored screens, as well as banner ads on the bottom of the home screen,” the company said in a statement. The problem, however, is that in theory an ad-supported Kindle sounds great! But if the device only costs $25 less than the current lowest-priced unit, why would anyone opt for ads on their device?

When weighing whether to go with ads or just drop an additional $25, what does Amazon think consumers are going to do? Now, if the device was $50 with ads, or even free with ads, then Amazon might have hit the jackpot. Imagine if they announced the Kindle was free? They wouldn’t be able to give them away fast enough.

This new move is a curious one. It would make sense in the context of unveiling a fancy new color tablet that is say, more advanced than the Barnes and Noble Nook, but less expensive than an iPad. You unveil the new product and oh by the way, announce that the beloved e-reader is now insanely affordable too. It’s something Apple has become the master of.

Amazon has slowly been laying the foundation for a media tablet that can compete with the iPad and Apple. The infrastructure pieces are in place between their video streaming, their online store, the new Mp3 cloud player (which is great btw) and an Android app store. Now they just need a tablet device to go with those pieces. The Kindle, as is, isn’t there yet. It’s strictly a very, very, good reading device.

There’s no doubt that e-readers are a wonderful product that will eventually give way to multi-purpose iPad-like tablets. Once you make the leap, you begin reading more, and buying more books, and there is really no looking back. Amazon seems to have missed a huge opportunity to conquer the market by getting as many devices (and establish brand loyalty when they roll out those fancy new tablets) in as many hands as possible. Amazon should have gone after the consumers that haven’t taken the leap yet. There are still tons of people out there that are on the fence. Free or $50 with ads? Lots of people wouldn’t think twice about making the leap. At $25 less than the one without ads? Good luck!

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