Amazon Kindle: Time for a Proactive Approach
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Amazon has sent the tech world buzzing with its latest Kindle price drop. B&N was the first company to get aggressive and drop nook’s price (taking out 3G feature in the process). Amazon Kindle is now being sold for $189, and it will still offer the 3G wireless feature that Kindle fans have come to love. We know Kindle 3 is coming in August, but that should not excuse Amazon’s flawed Kindle strategy. The company has gone from a proactive company to a reactive one over the past two years. Not the best way to compete.
Many Kindle fans will appreciate the latest price drop. It’s a major discount any way you look at it. What’s alarming with Amazon’s approach is the passive strategy Amazon has adopted in the past few months. The company needs to be much more aggressive if it wants to protect its position in the e-book reader market. Innovation and price-leadership are two ways to compete in highly competitive markets. In the case of Amazon, the company should go with both. It just needs to be more aggressive with both.
The idea of giving away Kindles for free still seems absurd. But there are plenty of ways for Amazon to make that work. Subscription plans, apps, and premium features can all help Amazon make its money back. At the same time, offering Kindle for free (or close to it) will put extreme pressure on other players in the market. It may not be simple for Amazon to do that at this point, but it should aim for it anyway.
Let’s face it. Companies engaging in price wars helps us consumers save some money. However, without innovation, these devices won’t get any better. Apple did not turn iPhone into a monster of a gadget by being passive. Amazon does not need to out-Apple Apple here. It does need to show us some of its cards. Dropping Kindle’s price every few month has worked so far. Now’s the time for Amazon to show why it is considered to be one of the most innovative companies in the world.
