$99 Kindle might be on the way

The Kindle might get a new bare-bones family member – a new $99 Kindle. Supposedly, by summer 2011.

The rumor/scoop is being discussed at the official kindle forum and there are a few things that instantly spring to mind -

  1. Shouldn’t the Kindle WiFi go down from $139 to $99 by mid 2011 anyways. It will have been 9 to 10 months since launch – economies of scale will surely kick in by summer 2011.
  2. If a Kindle without WiFi were made, and perhaps a few things like the microphone and speaker were left out, it might be quite possible to get it to $99. It might be possible to release a bare-bones $99 Kindle even right now.
  3. A $99 Kindle would sell like crazy.
  4. Amazon might be saving up its $99 Kindle for when the Nook 2 releases.
  5. Could B&N beat Amazon to the punch?

A $99 Kindle would be a very big deal. If Amazon can sell millions of Kindles on the strength of the $139 Kindle WiFi and the $189 Kindle 3, it’s likely to sell 5 million or more $99 Kindles in 2011. Perhaps it could even sell 10 million.

What competitors might a $99 Kindle face?

The Nook Color and the iPad 2 aren’t in the same price-bracket. What we might see is the Nook 2 WiFi (possibly at $99 or $129$) and a few cheap Android Tablets. There is the possibility of Samsung cutting the price on its eReaders and a few new low-priced eReaders will also probably arrive.

However, that’s really not much competition.

Amazon can undercut its competitors on price because it can factor in earnings from future ebook sales, it can sell a lot of Kindles from Amazon.com and not have to share a cut with retailers, and it doesn’t have to spend as much on marketing and promotions.

A $99 Kindle might not have very many competitors.

Will the $99 Kindle really arrive by summer?

Firstly, Amazon was able to launch a $139 Kindle WiFi in August 2010. It’s 6 months since then. The cost for various components, especially the display and memory, should have gone down by now.

Secondly, Amazon has probably sold a few million Kindle WiFis by now. The economies of scale must have kicked in already.

Thirdly, chip makers are making System on a Chip designs for eReaders which will help cut down price.

Fourthly, a new iPad 2 is around the corner and a Nook 2 might be on the way too. Amazon has to compete and price is one of its main weapons.

Fifthly, there are lots of low-priced competitors like new ‘eReaders’ from PanDigital and Tablets based on Android.

All signs point to a $99 Kindle arriving soon. A $99 Kindle should be here by Summer or Fall of 2011. There really is no reason for Amazon to not go for the kill – Everything’s lined up perfectly.

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