Posted by Sarah Rotman Epps on October 7, 2009
As you've likely heard by now, Amazon has announced a price drop of the Kindle 2 to $259 and the launch of an international Kindle that will run on AT&T and partner networks in 100 countries. Here's our take:
- The price drop is key to keep Amazon top-of-mind for US holiday shoppers. Forrester just released its eReader Holiday Outlook 2009 report, where we adjust our 2009 sales projections up by 50%. As Jeff Bezos acknowledges in the New York Times, “This has grown much faster than any of us ever anticipated.” Dropping the price of the Kindle will help Amazon harness this momentum and keep the Kindle competitive with less expensive eReaders like the $199 Sony Pocket Reader.
- Amazon wasn't ready to release a totally new device. We expect a lot of innovation from Amazon in 2010 on the device front, but until they're ready to release a totally new device, this is a way for Amazon to extend the appeal of the Kindle to US consumers (by making it cheaper) and to international consumers (by making it available to them).
- Amazon's dipping a toe in international waters, but this move doesn't ensure global dominance. The US is by far the leading market for eReader sales, but markets outside the US are growing quickly. And yet, international markets for eReaders are very fragmented--for example, China has its own eReader brands, like the leading Hanwong, which sells its device for $249 and it comes with 6,000 free eBooks. But even though Amazon is selling in 100 countries, that won't include China (but it does include India, Brazil, and Russia, as well as Cambodia, Vietnam, and even Myanmar).
That's the quick and dirty take..