But it’s neither too big of a catch (the ads don’t interrupt the reading experience), nor too big of a discount ($25 less than the currently least expensive Kindle).

So let’s look at this for a moment. It’s really not a bad deal. The ads are on the homepage and the screensaver, so instead of your favorite wallpaper when the Kindle goes idle, you’ll see a sponsor ad. Not an awful trade-off. No ads while you’re reading a book. So it’s not intrusive, and probably very easily ignored.

But the discount is only $25, bringing the price down to $115. That’s still really cheap, but I don’t think it’s cheap enough. I think Amazon should have gone for broke and priced it at $99, breaking the sub-$100 barrier. If nothing else, that would have a huge psychological impact in the market. Amazon’s all about gobbling up market share anyway. A $99 Kindle is better positioned to do that than a $115 Kindle.

The $99 (and lower) Kindle is definitely coming — it’s only a matter of when. I’m just surprised Amazon took this intermediate step rather than just going for broke and pricing this new ad-supported Kindle at $99 right from the start.

More info from TG Daily.

Nothing terribly new here, but it is interesting to note Amazon’s continued refusal to release any sales numbers for its Kindle hardware.

ANALYSTS have wondered what profit margins Amazon makes on its Kindle hardware business. “It is difficult to say Amazon is making much money at its new device prices of $139,” writes Marianne Wolk, an analyst at the Susquehanna International Group, in a report to clients at the end of June.

I still think the days of dedicated ereaders are numbered. They may remain as niche products (and even then, only if the price continues to drop until it’s almost a throwaway item, in the $20 to $50 range), but mass market penetration is simply not going to happen.

Barnes & Noble has been having some success recently selling their Nook e-reader. They’ve been promoting the device heavily in their stores and recently did a big push for Father’s Day. They’ve been pleased with the sales of the unit, though haven’t released any specific numbers sold. They even have an iPad app, which I have and is fine in its own right. Not as elegant as the iBook reader (the gaps between paragraphs in the B&N app are huge, and unfortunately not adjustable, which irks me), but the themes — various combinations of fonts and background colors — are a cool idea that also happen to be useful.

Some time ago I had this to say about the Kindle Reader after I got my iPad and played around with iBooks for the first time:

The Kindle Reader is dead after this. There’s no way in hell anyone is going to pay money for a device that does one thing only and does it in a completely shitty way compared to the iPad. Kindle Reader = extinct technology. The software may survive, but the hardware is toast.

I also had this to say:

True, the iPad is a multi-purpose device, which I’ve already argued is going to either kill the Kindle and Nook and their e-reader brethren or force them to (a) reduce price to an almost throwaway point or (b) incorporate additional functionality (i.e., iPad-ize them).

Point (a) above is already starting to happen. On Monday, June 21, Barnes & Noble dropped the price of the Nook by a sizable margin. They cut the price of its wi-fi and 3G Nook from $259 to $199, while at the same time introducing  a $149 wi-fi-only version. This is just the first salvo in what I predict is going to become an ongoing war between Amazon and B&N (and probably Sony at some point). This is a grab for market share in what is going to be a rapidly shrinking market of single function e-reader devices.

What about Apple? I hear you ask. (Yes, my hearing is very good.) Why aren’t you including them in this price war?

Because they’re not in it. They’re above it. Or beside it. Take your pick, but precisely because the iPad is a multi-function device makes them immune from this downward pricing trend. That may anger and irk fans of the Nook and Kindle, but I’m sorry, it’s true. When Apple launched the iPad the future of single function e-readers became very dark and grim, with the half-life of a soap bubble. Oh, they’ll be around for a few years more, with prices dropping faster than BP’s reputation, but the iPad chopped their heads off in one fell swoop.

They’re dead, they just don’t know it yet.

Larry Dignan at ZDNet had this to say about the Nook price drop:

The move is likely to put Amazon on the defensive and the e-commerce giant appears to have been either caught flat-footed or resting on its early Kindle lead. Many folks have noted that Apple’s iPad is a dedicated e-reader killer, but let’s exclude Steve Jobs & Co. from the picture. Even excluding Apple, Amazon looks a bit behind the curve on e-readers.

Amazon may have been caught flat-footed, but they didn’t stay that way for long. Later Monday afternoon they responded with their own price cut on the Kindle. They dropped the price from $259 to $189.

I’m really curious to see how low the prices of e-readers is going to get, and how fast. My money’s on one of the majors (Amazon, B&N, or Sony) dropping to a $99 price point by Christmas.

Or nearly as much strain as your mom told you. I always thought LCDs with progressive scan output and fast refresh rates eliminated much of the concern about “TV being bad for your eyes,” like I was constantly told when I was a kid. I thought the old CRTs (tube televisions) were bad because they ran interlaced video and had a slow refresh rate, which meant you could see flicker. (Apparently I was somewhat right in this, as it’s mentioned in the article.)

There are of course pluses and minuses to any reading technology, whether ink on paper, e-ink, or backlit displays (usually LCDs). Head on over to The New York Times for the article if you’re interested.

I’ve been thinking a lot lately about the Kindle and iPad and what the latter’s introduction into the marketplace will do to the former. I talked about it a little bit in my post when the iPad was introduced, and in the comments section there. There is some understandable defensiveness from those who have purchased a Kindle or Nook or are planning to do so about my assertion that “I really don’t expect either of those devices to exist for more than a couple of years at this point. Apple is simply too good with content delivery.” For Kindle and Nook fans, those are fighting words!

I want to be clear that I’m not rooting against dedicated eReaders — I’m very much technology agnostic. I go for whatever’s best for me (as do we all). I don’t like e-ink, I want backlighting, and I want a multipurpose device. Ergo, a dedicated eReader as they currently exist is out. I also think the software on the Kindle’s I’ve played with (I haven’t used a Nook yet) is clunky and awkward and far too inelegant for my taste. But for many of people it’s become a great way to read books, and I’m certainly not ever against that.

Here’s what I am pretty sure of: the iPad (or similar multi-purpose devices with e-reading as a feature set) will do two things: 1) force the price of dedicated eReaders way down the pricing curve, and 2) relegate them into niche status.

The Kindle and Nook fans disagree. So what basis do I have for this assertion that multi-purpose devices crowd out single-purpose devices?

The cell phone.

Cell phones were originally portable phones and nothing more; a way to roam free from the landlines that had everyone stretching curled cords throughout their houses in order to move around while talking. Mobility was just a dream — that’s why pay phones were ubiquitous. If you were in a public place, you had to use a pay phone.

But over time, more and more functionality was added to cell phones. I thought texting was idiotic when I first heard about it. Why the hell would you want to type on such a small thing when you can just call the goddamn person?! But now I text more than I use the actual telephony portion of my phone. I have friends whose teenage kids make ten to twenty thousand texts per month. (Yes, they all have unlimited texting plans). It’s now their primary method of communication. Telephony is now a secondary product on a phone.

We now have cameras on phones. Quality’s not the best, but you don’t need to carry a digital camera if you don’t want to. Sure, a digital camera (or, heaven forbid, actual film camera) can take better pictures than a cell phone camera, but there’s a convenience factor that’s hard to ignore. Snap a photo and with a few clicks you can text it to your friends or Flickr or Facebook wall, or all three.

Over time, more and more functionality crept into our phones. Web browsing, email access, GPS, video recording, and yes, ebook reading. They evolved into multi-function devices. Single purpose cell phones are pretty much extinct. Even the most basic, no-frills phones still come with texting and cameras. You have to look pretty hard to find phones that don’t have these features.

I expect those same pressures to come to bear on dedicated ebook readers. Either they’re going to have to add functionality and spin up into devices similar to the iPad, or they’ll have to become so cheap that they’re almost a throwaway purchase, probably $20 or so. Without one of those scenarios happening, I just don’t see their long term viability.