Last week Amazon announced that they’re reducing the list price of their Kindle 2 from $349 to $299, and I must say that it’s music to my ears–or should I phrase that as “ebooks to my eyes?”

As I’ve noted in several articles on this site, the Kindle rocks. And no, it’s not just because I’m a gadget freak (which I am) or because I used to bet my fellow co-workers at Lulu that ebook domination was just a couple years away. Ok, so maybe I lost that bet three times over a period of seven years–I’m overly optimistic about such technology-based market disruption–but I knew that the ebook’s “day in the sun” would eventually come and I knew that a technology company would lead the way–in the same manner that Apple changed the music industry with the introduction of the iPod and iTunes.

The Kindle is a winner for two main reasons–one, because it makes book purchasing convenient and cheap(er), and two, it makes book reading easy and enjoyable. As a matter of fact, the only real concern I’ve had with the Kindle is the relatively high price at $350–although it’s probably justified with the high R&D costs, the free cellular internet connectivity, the E-ink displays and small device footprint. But it’s a tough sell nevertheless–especially since once you buy the Kindle you then have to spend more money to buy the ebooks.

Amazon knows this, and they also know that lower Kindle prices will increase sales to more mainstream and price-conscious book buyers. It also grows their market share over competitors like Sony while increasing the overall ebook reader market size as well. This approach fits well with Amazon’s predatory experience-curve pricing strategy that has served them so well in the past–that is, set prices lower now based on projected volume-driven cost reductions later. Hey, it worked for Free Super Saver Shipping and we all loved that!

And that seems to be just what they’re doing with the Kindle. According to Bloomberg, Amazon was able to lower the cost because of higher volume.  Drew Herdener, an Amazon company spokesman, said “Whenever we are able to create cost efficiencies like this, we pass the savings along to our customers.”

Not only that, but Amazon also knows that Kindle sales growth will drive ebook sales growth, and that’s good news for authors and buyers alike. The Kindle is a great (and maybe the best) opportunity for today’s self-published author because, well, for one good reason–it’s free to publish on the Kindle platform. A local self-published author told me that he paid last month’s house payment with his Kindle royalties and I believe him, and we’re talking about a fiction novel that’s been released for only three months. And sure, he’s marketing the hell out of it, but the fact is that print book distribution just can’t reach buyers as quickly and efficiently as ebook distribution. Amazon knows this, and Bloomberg.com quotes Sandeep Aggarwal, an analyst at San Francisco’s Collins Stewart LLC, who says, “By 2012, Amazon.com will make more than $2 billion in annual revenue from the Kindle and related content.”

With the world of traditional publishing falling all around us, self-published authors can–and are–taking advantage of the Kindle and the ebook format. If you’re not publishing into the Kindle, you should be.

Lastly, from a technology and device standpoint Amazon is building market domination with the Kindle platform and they’re segmenting the market at the same time. All Kindles use the same basic ebook technology and provide similar ebook reading experiences. This allows an original Kindle owner like me to shop and read ebooks the same way that Kindle 2 and Kindle DX owners do. If you want a larger screen, however, you’ll pay a pretty penny for the Kindle DX–$489 is still cost-prohibitive for the casual book reader.  Not everyone needs that (or can afford it),  but you can pay for the privilege.

But $299 for a Kindle 2? As the author in this Examiner.com article points out, $299 is a pretty fair trade for the pleasure of enjoying a good book–better yet, three, five or ten books– at your convenience. Because once you own a Kindle you’ll wonder how you could ever get by with reading only one book at a time.

And, if you’re an author, you want to be going where your buyers are going–it’s that simple.

Thanks, and til next time–Keep publishing!

Henry Hutton
PublishandSell.com