Gruber Sees The First Step

Kindle Fire

Last year Amazon tried something new, with an option to pay less for a Kindle that displays “special offers”. They’re ads, but they never interrupt reading — they’re only shown on the home screen and screensaver. Today, they’ve flipped the marketing around. Instead of paying less in exchange for looking at these ads, the “special offer” Kindles are now the default, and you can pay a $30-50 premium for a Kindle without them. ($30 on the low-end non-Touch model, $40 for Touch, $50 (!) for Kindle Keyboard.)

Amazon has always catered to price-sensitive customers, and I suspect they know their audience well. And Amazon is a data-driven company. I’ll bet the $40 premium is based on how much money they expect to make from the ads they sell and products they promote via the special offers. Last year the special offer Kindle was only $25 less; the data must show that the special offers are worth more than $25 per Kindle to Amazon.

Boldfaced emphasis added by me.

I wouldn’t expect Gruber to go beyond that, connecting all the steps in Bezos’ future plans, because he’s not a book person; publishing isn’t his thing.

But at least he can clearly see what Bezos has done there!

Just that first step seems to elude too many people.

Previously here:

Amazon’s Kindle Price Punking
It Always Seems So Innocent


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