Amazon.com announced a new Kindle with "special offers" for $114, priced $25 less than the bestselling $139 Kindle but still above the magic $100 price tag that analysts say will make e-readers affordable to most consumers.
The $114 model is the same as the $139 Kindle, except users will see ads and sponsored screensavers. It's available for pre-order now and will be shipped on May 3. This type of deal is not new: It's not uncommon for on-screen advertising and promotions to be used as trade-offs for lower prices on consumer wireless products.
Several analysts last year predicted that the prices of black-and-white e-readers, including the Kindle, would drop below $100 by now. Amazon seems to be moving in that direction, while some of its competitors are adding color displays and other new features to their devices but keeping their prices roughly the same.
"We're working hard to make sure that anyone who wants a Kindle can afford one," said Amazon CEO Jeff Bezos.
The "special offers" that Amazon is touting will likely be promotions from advertisers that appear on screensavers or at the bottom of the home screen. Buick, Olay, Visa and Chase's Amazon.com Rewards Visa card are the first sponsors. Amazon said that examples of the promotions include an offer of a $20 Amazon.com gift card for $10 and a deal through which customers will receive a $100 Amazon.com gift card when they get an Amazon Rewards Visa Card.
Amazon seems confident that its new advertising model will generate interest among potential customers. In addition to the new Kindle, the online retailer introduced a free Kindle app and a website where customers will vote to choose the most attractive display advertisements that will later become Kindle screensavers. The app is called AdMash.
Sign up for CIO Asia eNewsletters.