Disagreeing With $149 as a Magic Number

Reading about the Nook’s sorta impressive price-drop, there’s speculation that $149 is the magic price point.


While I absolutely agree with Guy that Sony/Kobo/Irex–oops, sorry/Whatever-the-hell-Borders-is-selling are even toastier than before, I don’t think $149 is that magic number. As a comparison, I’ll go with low-end smartphones.

Currently, VirginMobile, as part of its pitch to offer you, without a contract, $20 a month for unlimited data, is selling the LG Rumor2, and the LG RumorTouch. The latter is $149, not even on store shelves, and a survey of vendors indicates little enthusiasm. It’s the Rumor2, priced, like the XTC and WildCard before it, at around $89, that gets customers interested*.

Magic point for impulse buys is still under $100. Let’s see what Amazon does.

*Well, sort of interested. Supposedly, there will be a Kyocera Android phone in a few weeks, which is why I’m out surveying vendors during shopping trips with the missus… Meanwhile, I just bought an Ipod Touch. So, maybe I’ll upgrade after I get back from China, sometime before Book Festival Season starts in the fall.

About dmoynihan

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  • http://loudpoet.com Guy LeCharles Gonzalez

    To clarify, I don’t think $149 is the “magic number” for mainstream adoption, because I don’t believe eReaders will EVER have their fabled iPod moment, but I do think it’s the right price for the Nook, and will be attractive to anyone who’s been hesitant to buy the Kindle 2 at $259.

    I also don’t see a legitimate $99 eReader ever happening without a subscription plan of some sort to go with it, something I suspect only Amazon or B&N could pull off, and likely only if publishers bought into it, which I don’t see happening in the near future.

  • http://www.munseys.com dmoynihan

    :)

    Famous last words!

    Tell you what, I bet a beer and a shot, from the second bar on the BEA/GoodReads tour (name escapes me), Amazon does a $99 Kindle, likely smaller and Wifi-only, by the end of summer. Loser has to buy a round, maybe in conjunction w/ the Brooklyn Book Fest.

  • http://loudpoet.com Guy LeCharles Gonzalez

    Was the second bar Botanica? (I went straight there, so don’t remember the order.) I think I win this bet either way, so you’re on!

  • http://www.munseys.com dmoynihan

    Wait, Botanica was the one underneath the stairs or something. That’ll work, but it was the third one that had the good whiskey!

    Either’s fine.

    /Shake.

  • Bill P.

    “…attractive to anyone who’s been hesitant to buy the Kindle 2 at $259.” What about at $189?: http://yhoo.it/98j1ll

    You think folks’ll quibble over $40?

  • http://www.munseys.com dmoynihan

    Might. There’s a huge slashfic/fanfic contigent that’s always considered devices too pricey.

    /You’d be amazed how much payday Fridays can drive sales…

  • DMcCunney

    Want to make a reader under $100? Don’t use eInk. If you do use eInk, hitting that price point, let alone making money on the deal, will be a challenge. (iSuppli did a teardown where the estimated the eInk screen and controller at about $80 of a Kindle’s costs.)
    ______
    Dennis

  • http://www.mobileread.com mtravellerh

    Yes, 80$ for an e-ink screen is about the current rate. This is really a big problem but this price point is already coming down because of the first competition showing up, even if the quality is quite crappy.

  • DMcCunney

    Back when I covered the Sony Reader launch for MR, eInk’s VP or Marketing told me other manufacturers besides PVI had licensed the technology, so supply constraints weren’t weren’t a Sony worry – they could *get* the screens. Subsequently, PVI *bought* eInk, which made me wonder a bit what the effect would be.

    Yeah, the component cost will come down, but I doubt it will come down *enough* to make a >$100 reader possible. And with several new display technologies promising color, fast refresh, *and* low battery usage emerging, eInk will need more than cost reductions.

    My personal feeling is that dedicated readers are a niche market, not large enough to support the volumes needed for really low cost devices. The Apple iPad, which supports color and has a roughly reader form factor may point the direction of the future. You won’t see one >$100, but it’s a multi-function device that can do other things besides display ebooks. People who would balk at the price of a dedicated reader might not balk at the higher price of a multi-function device in that form factor.

    You can’t view YouTube on a reader…
    ______
    Dennis

  • http://www.munseys.com dmoynihan

    Well, my bet is on Amazon squeezing suppliers, and remembering that until the new Kindle (mebbe), E-Ink is largely unchanged from ’06. But, I’m biased!

  • DMcCunney

    There’s a limit to how much you can squeeze suppliers before they politely decline the business because they won’t make money on it. I think trying to produce an eInk reader a < $100 pretty well defines that point.

    And the upcoming Kindle (with the reported “paper white” display) is at most an incremental improvement, which I don’t see affecting costs.

    I’ve never really seen the Kindle as more than a pump-primer. From where I sit, for Amazon, it’s about the books. They see a market in ebooks, and want to be the dominant vendor supplying them. They are leveraging their strengths in catalog marketing and as the dominant paper book retailer, and adding ebooks which don’t have warehousing or distribution costs.

    It doesn’t matter to them whether you have a Kindle, or you use the iPhone or PC Kindle viewer app. (And given their increasing popularity, a Kindle reader app for Android devices strikes me as a likely next target.)
    If you read Kindle editions, you are locked into Amazon as the supplier, and the vendor lock-in is the point.
    ______
    Dennis

  • http://www.mobileread.com mtravellerh

    Dennis, the Kindle app for Android is already a reality

  • DMcCunney

    Yeah, you’re right. I should have Looked Stuff Up before making that remark. Nice to see I was on target about Amazon’s probable direction. I suspect the success of the Motorola Droid (which has put Motorola back in the cell phone race) may have been the deciding factor.