The Channel Wire

July 10, 2009

Amazon's been all over headlines this week for dropping the price of its Kindle 2 by $60 without much in the way of fanfare, leading to speculation about the Kindle's sales strength and Amazon's long-term strategy for keeping the Kindle at the forefront of dedicated e-reading devices.

And yet, the price cut -- which brings Kindle from $359 to $299 -- seems another tacit acknowledgment from Amazon that the Kindle's future as a stand-alone device is limited -- how could it not be, at least in present form, with so much e-reader competition springing up now and future devices that can do everything from answer calls to provide e-mail to offer an e-reading experience on par with the Kindle's.

No, every major move that Amazon's made since the Kindle 2 debuted in February has been a pre-emptive strike toward diversifying and pushing the Kindle brand, with the end goal, it would seem, to make Amazon and Kindle synonymous with e-readers and e-reading long past the usefulness date on the Kindle device.

Back when Kindle 2 arrived, much of the discussion was on alternative e-reading devices for periodicals or other large-format publications. From Amazon came the Kindle DX, a larger-screen version of the Kindle that for $489 offers a periodical e-reading platform and, more importantly, one for textbooks that Amazon will pilot with a number of colleges and universities this fall.

On the application side, one of the biggest knocks against Amazon's Kindle was that e-reading apps for say, Apple's iPhone, would in effect make the iPhone (or other smartphones) an e-reader, especially for those who didn't need the best visuals or ergonomics in the world. In response, Amazon was quick to launch a Kindle application for iPhone, and also bought Lexcycle, the maker of popular iPhone e-reading app Stanza, even though it's still not readily apparent what Amazon plans to do with Stanza.

Amazon is also experimenting with various business models for publishing blogs as a subscription and is also offering niche publishing such as digital law books from the nonprofit Practising Law Institute.

Now comes the price drop, happening just as the initial buzz on Kindle and Kindle DX has sufficiently worn off. There's still plenty to wonder about just how well Kindle is selling -- especially since Amazon CEO Jeff Bezos is keeping such a tight lid on sales figures -- but the move is a pre-emptive strike for a company and a brand getting known for them.