The Kindle or Paper
by Gerald Trites

It seems the sales of Amazon's Kindle are not exactly taking the world by storm. This despite the fact many people are accustomed to reading electronic print, and the Kindle really does make it easier on the eyes than normal computer monitors. What's the problem, then?

Likely, its the price = $359 each, now reduced to $299. Readers are faced with a decision when they want a book to read. They can buy the book off the stand in their local bookstore for, say $20 or they can order up a Kindle from Amazon and hope that they will then be able to download the book for a further price. Big expenditure plus uncertainty equals not buying.

Add to that the fact that people are comfortable with reading paper books, that we are in a recession where an unnecessary expenditure of $300 matters, and you have a further disincentive to buy. Add to that the fact that people know from experience that new technologies usually go down in price, often quite radically. Why buy today at $300 when in a matter of months it may be possible to buy for $50?

What should Amazon do? Should they reduce their price further, tough it out until the recession ends or revise their business model?

Probably the latter is in order. The idea of selling a device like the Kindle for a profit is a tough one. They need to consider alternatives around pricing packages that include various books and effectively sell the device with content that will appeal to people. After all, its the content that people are interested in, not the device itself. People don't go to the grocery store to buy an empty bag. It's the groceries in the bag they want.

Cutting prices probably won't be enough.