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Amazon lowers Kindle e-book reader price

July 09, 2009|Michelle Maltais

Will a $60 price drop make more book lovers shelve their hardcovers for a digital display? Amazon hopes the answer is yes.

The Seattle-based online retail giant dropped the price Wednesday on its Kindle 2 e-reader to $299 from $359.

The new price is $100 less than the cost of the original Kindle when it was introduced in 2007.

The Kindle 2, released in February, is about as thick as a pencil, weighs about 10 ounces and can store more than 1,500 books.

It also includes a somewhat controversial text-to-audio feature, plays MP3s music files and can hop onto the Internet over a 3G wireless connection through an arrangement with Sprint.

Readers can wirelessly download books to the device and pay to subscribe to blogs, magazines and newspapers (including the Los Angeles Times) that are automatically downloaded.

In May, Amazon unveiled the Kindle DX, a large-screen version targeting newspaper and magazine readers.

Amazon has not released figures on its sales of Kindle devices or of electronic books bought by Kindle users.

A company spokeswoman said the Kindle 2 price cut was made possible by a reduction in the cost of making the device.

Edward Weller, an analyst at securities firm ThinkEquity in San Francisco, called the move surprising because it came only five months after the Kindle 2's launch.

But in a note to clients, he wrote: "We're confident in dismissing speculation that the price cut is in reaction to a broad slowdown" in sales of the product.

Weller, who has a "buy" rating on Amazon's stock, predicted that the Kindle could play a significant role in furthering Amazon's original mission: selling books.

Amazon's shares rose $1.73, or 2.2%, on Wednesday to $77.36.


The Associated Press was used in compiling this report.

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