Peter Kafka

Recent Posts by Peter Kafka

Study: Everyone Wants a Kindle–For $50

cheapThe Kindle gets plenty of attention, but the e-book reader is still a niche device. When will that change? When it gets cheaper.

That insight is blindingly obvious, of course. But a new study from Forrester (FORR) tries to figure out just how much Amazon (AMZN) and its competitors will have to discount their devices in order to get them into millions and millions of peoples’ hands.

The answer? A lot.

After flourishing a variety of of charts and graphs (Forrester tells us that it employed something called a Van Westendorp Price Sensitivity Meter, which sounds like an awesome Dr. Evil device but turns out to be just a pedestrian marketing technique), Forrester argues that the pricing sweet spot for a dedicated e-book reader is…$50.

The readers will get a whole lot cheaper, of course, just as all consumer electronics do. But given that Amazon’s Kindle2 now goes for $299, and Sony’s (SNE) comparable gizmo will go on sale this year for $399, it may take a while to get there.

And even then, Forrester argues, the Kindle or its equivalent may never reach the same kind of ubiquity that Apple’s (AAPL) iPod line has–in large part because of the success of Apple’s iPhone and other do-it-all devices. It’s an argument I’ve made several times, but just for variety, here’s Forrester’s take:

The price points of multi-use devices like smartphones and netbooks informs the value that they assign to a single-purpose device like an eReader. With new 3G iPhones selling for $199 and a variety of netbooks selling for $300, devices in adjacent categories put the squeeze on eReaders. Convenience plays a core role in consumers’ decision-making. For many, the superior functionality of dedicated eReaders simply isn’t seen as making them sufficiently more convenient than cheaper multifunction devices to justify the additional cost.

[Image credit: Jonathan Harford]