Pricing competition with Apple and Sony has led to Kindle price reductions in the past and we expect further price declines.
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If iBooks is almost as good as Kindle today on price and selection, imagine where it will be in a year.
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And the Kindle fire should draw price-sensitive, entry-level tablet users.
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Amazon will sell its Kindle Reader at a lower price, but with advertising.
ComScore evaluated purchase decisions amongst tablet purchasers and found iPad owners cared most about app selection and brand while Amazon Kindle owners cared most about price, followed by selection of apps.
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Along with a widely expanded Amazon lineup that includes multiple Kindle Fire HD models and a price-cut tweak to the original Fire, two of the largest players in the mobile world now have top-to-bottom device businesses built around selling at break-even prices and recouping their money through content.
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Amazon has kept figures on Kindle hardware and title sales confidential, but the number of people reading periodicals on the Kindle remains small, partly because of price.
It lacks the price point of a Nexus or Kindle Fire, and it lacks the name recognition of an iPad.
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But as much as Bezos insisted that the Kindle Fires are the best tablets at any price, it seems likely that its rivals will continue to draw plenty of buyers as well.
There are a few new members of the Kindle Fire family, one at every popular tablet price point.
The iPad mini does have LTE support at a higher price point, which the Nexus and Kindle lack.
First, the Kindle Fire is coming in at a substantially lower price point.
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But I suspect that the feature sacrifices will offset the price differential that might otherwise have made the Kindle Fire a significant iPad competitor especially if Apple, as it did with older iPhones, offers a lower-priced iPad 2 in tandem with the iPad 3.
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Thus Amazon was losing money on the Kindle likely with the idea that this low price would help encourage people to buy its e-reader yielding higher market share for a platform on which Amazon might be able to deliver content and commerce to consumers.
But it has said repeatedly that Kindle devices (which is sells at a break-even price) are its hottest items.
In benchmarking that price point as the default value for nearly all books in the Kindle Store, Amazon was discounting to a loss, presumably to build adoption of the Kindle platform.
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But at that bold price point, it is very likely to sell tens of millions of Kindle Fires.
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