Amazon is all set to launch a subsidised Kindle e-book reader supported by advertisements. The new Kindle is priced at $114 (about Rs 5,000).
The WiFi model of Kindle earlier used to cost $139 (about Rs 6,200), so the users are saving $25 (about Rs 1,100), which is certainly not a huge amount. But since Amazon is also offering special deals at the same time, the customers may end up saving more money as they use the device.
Amazon has made sure the advertisements do not distract users from their reading experience, as they would be displayed only at the bottom of the home page and on screensavers.
Amazon has not clarified whether the Kindle advertisements would be served on Kindle apps or not. In a way, Amazon is just making sure it can engage customers for a longer period of time as the chances of users buying Amazon products is less if they are spending time at Kindle or accessing Kindle apps from other devices.
Some users expected the price to go below up to the two digit psychological $99 price. Amazon very well understands the consumer psychology, as there are so many products they sell at $0.99 and $9.99.
So if Amazon people have not reduced the price to $99, there must be solid reasons behind it. Most probably, this is just an experiment for Kindle, they are just trying to find out how their sales are affected by this move. If they make enough money with the ad supported Kindle, probably the price may go down as well.