I have not read the other comments on this post, so forgive me if what I have to say has already been said by some of the more observant and/or knowledgeable readers.
Amazon, as many already know, has been very secretive about their Kindle unit sales numbers under the guise of, well, always being secretive. To me, this is nonsense, especially for a company traded on the NASDAQ which wants to draw attention to a potentially revolutionary (though not in aesthetic) device--the next iPod (which was the next Walkman), so to speak. This just doesn't jive.
Now, my degree in economics might not be worth much, but it did manage to impress upon me one concept: supply and demand. Unless I'm mistaken, if Amazon is continuously selling out of the Kindle, as Jeff Bezos so frequently reminded us in his open letters, and is working so hard to replenish stock, how is it that they could justify--again, as a profit-centric publicly-traded company--lowering the price?
The most probably reason is that supply is outweighing demand.
Of course, there are other possible reasons as well. Perhaps the cost of production decreased and they're doing the good company thing by passing on the savings to their consumers--as Amazon is wont to do with many of its wares. Perhaps they're reducing overall profit per unit in favor of a higher-volume approach. Perhaps they're responding in kind to the calls for a more reasonable price to compete with the likes of the slew of competitors, such as the sleek Sony Reader, which I admittedly own (2nd Gen). Perhaps they're cleaning out inventory in anticipation of a new model?
Who knows?
All I know is this looks bad from a more thoughtful perspective, and even though I own a competitor's device, I'm rooting hard for a more serious transition to e-books.
Gilbert Tang @ May 27th 2008 3:24PM Now, my degree in economics might not be worth much, but it did manage to impress upon me one concept: supply and demand. Unless I'm mistaken, if Amazon is continuously selling out of the Kindle, as Jeff Bezos so frequently reminded us in his open letters, and is working so hard to replenish stock, how is it that they could justify--again, as a profit-centric publicly-traded company--lowering the price? ---------- exactly.
Kindles were on backorder until the last month or so when Amazon brought in a second factory to produce the devices. Now the supply can keep up. Amazon is using this as a opportunity to increase their volume by lowering the price.
Remember that Amazon has two ways to make money on the Kindle... the device itself and on the books that owners buy.
If they can increase the volume of Kindles in people's hands by lowering the price, they can make up the difference in increased ebook sales.
Still economics but slightly more complex than a simple supply/demand calculation.
Now that we've thrown 'em off the trail, use the form below to get in touch with the people at Engadget. Please fill in all of the required fields because they're required.
I have not read the other comments on this post, so forgive me if what I have to say has already been said by some of the more observant and/or knowledgeable readers.
Amazon, as many already know, has been very secretive about their Kindle unit sales numbers under the guise of, well, always being secretive. To me, this is nonsense, especially for a company traded on the NASDAQ which wants to draw attention to a potentially revolutionary (though not in aesthetic) device--the next iPod (which was the next Walkman), so to speak. This just doesn't jive.
Now, my degree in economics might not be worth much, but it did manage to impress upon me one concept: supply and demand. Unless I'm mistaken, if Amazon is continuously selling out of the Kindle, as Jeff Bezos so frequently reminded us in his open letters, and is working so hard to replenish stock, how is it that they could justify--again, as a profit-centric publicly-traded company--lowering the price?
The most probably reason is that supply is outweighing demand.
Of course, there are other possible reasons as well. Perhaps the cost of production decreased and they're doing the good company thing by passing on the savings to their consumers--as Amazon is wont to do with many of its wares. Perhaps they're reducing overall profit per unit in favor of a higher-volume approach. Perhaps they're responding in kind to the calls for a more reasonable price to compete with the likes of the slew of competitors, such as the sleek Sony Reader, which I admittedly own (2nd Gen). Perhaps they're cleaning out inventory in anticipation of a new model?
Who knows?
All I know is this looks bad from a more thoughtful perspective, and even though I own a competitor's device, I'm rooting hard for a more serious transition to e-books.
*probable
Gilbert Tang @ May 27th 2008 3:24PM
Now, my degree in economics might not be worth much, but it did manage to impress upon me one concept: supply and demand. Unless I'm mistaken, if Amazon is continuously selling out of the Kindle, as Jeff Bezos so frequently reminded us in his open letters, and is working so hard to replenish stock, how is it that they could justify--again, as a profit-centric publicly-traded company--lowering the price?
----------
exactly.
Kindles were on backorder until the last month or so when Amazon brought in a second factory to produce the devices. Now the supply can keep up. Amazon is using this as a opportunity to increase their volume by lowering the price.
Remember that Amazon has two ways to make money on the Kindle... the device itself and on the books that owners buy.
If they can increase the volume of Kindles in people's hands by lowering the price, they can make up the difference in increased ebook sales.
Still economics but slightly more complex than a simple supply/demand calculation.