Tipping point
All products have a pricing ‘sweet spot', which represents the perfect equilibrium between consumer appeal and profitability, and Amazon reckons it's reached that with its Kindle e-reader, following a recent price cut.
"We've reached a tipping point with the new price of Kindle; the growth rate of Kindle device unit sales has tripled since we lowered the price from $259 to $189," said Jeff Bezos, founder and CEO of Amazon.
"In addition, even while our hardcover sales continue to grow, the Kindle format has now overtaken the hardcover format. Amazon.com customers now purchase more Kindle books than hardcover books--astonishing when you consider that we've been selling hardcover books for 15 years, and Kindle books for 33 months."
The announcement went on to list some recent Kindle milestones, including the fact that last month Amazon sold nearly twice as mant Kindle books as hardbacks. Also, some recent Association of American Publishers' data reveals that total e-book sales doubled year-on-year in May.
We were reminded that the $189 price gets us an e-reader with global 3G and no additional fees. To be honest, we hadn't really considered buying an e-reader until now - not being convinced that the up-front outlay was justified by the convenience of not having to carry a bunch of books around. But we think Amazon has a point now, especially considering any Kindle book can also be viewed on most other mobile devices if you don't happen to have your Kindle to hand.
