Piper Jaffray’s Munster: Amazon should cut Kindle price in face of iPad launch, glowing reviews

“With the Apple iPad getting glowing reviews with sales scheduled to launch Saturday morning, the Street is getting increasingly nervous about the impact the device is going to have on sales of the Amazon.com Kindle e-book reader,” Eric Savitz reports for Barron’s.

“To combat the issue, says Piper Jaffray analyst Gene Munster, Amazon ought to cut the price of the Kindle: he suggests a reduction to $149, from the current $259,” Savitz reports. “In an interview with Tech Trader Daily, Munster says he told his firm’s sales force today that AMZN shares are likely to be under pressure for a few weeks as the Street worries about the iPad eating into Kindle sales. As he notes, Amazon provides no data at all on Kindle unit sales; he estimates that Kindle sales lifetime to date are in the 2-3 million range.”

Savitz reports, “Munster adds that he would discourage Amazon from trying to compete more directly with the iPad, a battle he thinks they would almost certainly lose.”

Full article here.

MacDailyNews Take: B, b, but… E-Ink!

[Thanks to MacDailyNews Reader “John A.” for the heads up.]

16 Comments

  1. How much profit would they make at that price? I mean why would they want to take a loss? I mean probably a bigger loss on each sale. Why not just sell books to the iPad crowd and cut your losses on the Kindle. Or perhaps spend millions trying to make an iPad killer. That should not take many years to do. Best yet just forget books and be a reseller like eBay which they are becoming anyway.

  2. Good idea. $149 sounds about right. And I’d kill the $489 version. Just make a cheap ass reader that nobody will compare with an iPad. Hey — $99 is even better and you’d sell a crapload.

    mw— perhaps

  3. ‘”…he would discourage Amazon from trying to compete more directly with the iPad, a battle he thinks they would almost certainly lose.”

    That is absolutely accurate … once you remove the word ‘almost’.

  4. Amazon should just get out of the hardware business and make their money off the sale of books and ebooks thru the iPad, etc. They will get better margins on ebooks thru the iPad, using the Agency model.

  5. @ Figurative
    “But, but you you can read the Kindle in bright sunlight!”

    True. But you can read the Kindle in the dark or even low light. I think the Kindle may still have some value at the vacation poolside. I know if I left an iPad sitting out while I took a dip it would be gone when I got out. A Kindle? Odds are no one would waste their time stealing it.

  6. I was thinking the same thing. “Bloodbath”, but it would be self-inflicted. What is it with analysts so caught up in sales numbers that they forget about profitability?

  7. @Spark

    @ Figurative
    “But, but you you can read the Kindle in bright sunlight!”

    True. HOWEVER you can NOT read the Kindle in the dark or even IN low light.

    There fixed it.

  8. Why? Amazon just needs to get their iPad ebookstore app out there, so they can sell ebooks to iPad users. Amazon wants to profit from selling the media. Apple wants to profit from selling the hardware. Sounds like a decent partnership to me. Kindle should just be cancelled, and Amazon should make a deal with Apple so that existing Kindle owners can get $50 off on an iPad by “recycling” in their Kindle, along with a $50 gift card for purchases using the Amazon ebookstore app.

    But I agree that the Kindle’s price should have been $199 or lower to begin with… If Amazon was serious about ebooks, they should have been selling Kindles at just above break-even price, so that there are more potential ebook customers. But I think they were afraid of too much success with electronic media, because that would mean change to their current business. Now, Apple is forcing them to confront this potential change in how people consume text-based media.

    I think Apple is the only major corporation that constantly embraces change instead of milking the status quo for as long as possible.

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