Amazon announced last that it would knock $60 off its Kindle 2, bringing the new price to $299. Much of the coverage stopped there. and didn’t provide much context into why this is an important development for publishers.

Forget about the price drop; that’s secondary news. The bigger news: it appears that Amazon is adjusting to the competiton, which is repidly releasing cheaper reader alternatives. In addition to the competition,¬† Amazon is having trouble breaking into some lucrative European markets, according to multiple reports. That inability puts pressure on Amazon to find more revenue streams.

Amazon made a lot of news with the Kindle DX, and the release kept the Kindle brand in the public consciousness. But look at everything that’s happening in the e-reader market:

  • Crunchpad by Techcrunch should be demoed next month, and it has a promised price of $299 or less.

  • The Ditto Book and Cool-ER e-readers are now available, at $249.

  • The Smart Q7, which is along the line of the Jointech device, sells for $189


And those are just a few developments. Taken in context, Amazon had to make a move in these price-conscious times. And that’s GREAT for publishers, who are trying to figure out which reader is best for its market, and how they can make money by utilizing readers in lieu of expensive ink, paper, and distribution costs. The further manufacturers drive down the price, the better chance publishers have to recoup their upfront costs and make a profit.

Over time, you can expect these devices to drop in price further. When a manufacturer can figure out how to sell a color wireless reading device for $199, then I think you’ll see adoption take off. And, at that price, publishers can afford to buy them and give them to their customers, provided they buy a subscription to the information they produce. That will help the health of the industry.

The views expressed on this blog are mine alone

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