Prime Time For Kindle

As rumours go, it's an intriguing one. Amazon is said to be considering a give-away that could see more Kindles out there in the world.

It's being reported that those who sign up for Amazon Prime might find a Kindle in their mail box.

If you buy a lot of books, you may already be a member, taking advantage of the free shipping while convinced that $79 per year is a bargain to get your books a few days faster than the rest of the non-Prime readers.

Yet the Kindle sells for far more than $79, so how could Amazon afford to give them away?

The price of any new device usually goes down, in no small part because the manufacturer knows there's an eager audience lusting for new toys. Some people will pay just about anything to have the latest device, and cost is no great barrier. Once that market is saturated, it's time to appeal to the rest of the book-reading public, and that may be where Amazon is coming in.

Kindles may not cost as much to produce as their current price would suggest. Find a price point that would allow Amazon to break even and why charge someone for the Kindle?

Go buy razor blades and you'll see the marketing angle. Wasn't Gillette quick to send out free samples of their latest razor, all for free? Once you used it, however, you had to buy sharp new blades for the thing, and there you were.

Even cell phones fall into that particular scheme. Give someone a device that they find they must have, and charge for the privilege of using the thing. Calling plans, minutes, monthly fees---the carriers make more down the line from a free phone than they could in selling the things without the two-year contract and monthly bills.

Amazon could assume that someone who was paying $79 per year to get their books faster would love to get their books instantly through a download. Give that person a Kindle and they'd buy more books. After a certain number of titles are purchased, Amazon would hit the break even point on their give-away, and further purchases would be pure profit.

That sort of thinking only works, of course, if the people who get the free Kindles find that they like them and can't get along without them. There's the danger for Amazon that the free Kindles won't have the desired impact, and without titles being purchased for the Kindle, it's a losing proposition.

Which makes you wonder, if Amazon is hearing the patter of little Apple feet and feeling the heat of iPad competition. Better to get a Kindle into everyone's hands and crowd out iPad's potential sales, or it's all over for the Kindle monopoly on e-books.

The last thing that Jeff Bezos wants is for his Kindle device to end up in the back of the box room, stored away with the Betavision VCR or the Sega Genesis game system.