April 12, 2011

Amazon’s New Cheaper Kindle Features On-screen Ads

Amazon has aggressively dropped the price of its Kindle electronic book reader to $114, but requires customers to view ads in exchange for the lower price.

Analysts from Forrester Research Inc. in Cambridge, Massachusetts, predict that the U.S. sales of e-books will almost triple to $2.8 billion by 2015, reports Bloomberg.

At $25 less than the current lowest priced Kindle, the Kindle With Special Offers makes the e-book more affordable, and hopes to gain a bigger price advantage over its rivals, such as Apple's iPad.

"We're working hard to make sure that anyone who wants a Kindle can afford one," Jeff Bezos, Amazon founder and chief executive, said in a release.

"Kindle with Special Offers is the same #1 bestselling Kindle -- and it's only $114."

Amazon is working with advertisers to ensure that the reading experience will not be disrupted.

"It was very important that we didn't interfere with the reading experience," says director of Kindle products Jay Marine.

He says that the ads will appear as a screen saver and visible as a banner at the bottom of the screen on the user's home page.

Users will also be able to log onto their Kindle account via Amazon.com to adjust preferences about the types of screen savers they would like to see.

General Motors Co.'s Buick, Proctor & Gamble Co.'s Olay skin products and payments processor Visa Inc. will be among the first advertisers at the new Kindle's launch.

Amazon will also promote itself on the device by offering readers a $10 gift card for $20 worth of merchandise bought on its site. Some other launch deals include discounts on audible books, digital music and a Roku Streaming Player at half off.

Some potential buyers of e-readers will be turned off by the ads, but Marine believes that the money-saving offers will be appealing, saying, "We think customers are going to love it."

The Kindle is Amazon's most popular product, reports Bloomberg. It has brought in $5.42 billion in revenue this year.

Currently, several different Kindle versions exist at different prices. The $139 Kindle delivers e-books through a Wi-Fi Internet connection, while the $189 Kindle offers Wi-Fi and 3G wireless network capabilities. There is also a larger Kindle available at $379.

The new Kindle With Special Offers will be available to purchase on May 3 at Amazon.com as well as Target and Best Buy stores.


On the Net: