This is in fact the second time in the past year that Amazon has lowered the price of the Kindle in Germany. They first lowered the price 3 months ago to 69 euros. At the time I wasn't certain whether that was a sale or a permanent price, but the Kindle kept that price for 3 months before the price was lowered again.
The Kindle is still selling for 79 euros on Amazon's other European retail websites, and that is probably a sign of Amazon breaking with their past pattern of setting a regional price. Clearly they are focusing on developing just the German market at the moment.
That would fit with the latest industry gossip. There isn't any current data to back up the impression, but the data from past years does tend to support the idea that the German ebook market is growing.
For example, the German ebook market was worth about 2.4% of the overall book market in Germany in 2012 (according to GfK), up from 1.6% in 2011. At the same time, the average price of ebooks in Germany dropped from 10.71 euros in 2010 to 7.72 euros in 2012. A growing number of publishers were offering their ebooks at a lower price than the print edition (69% in 2011 vs 87% in 2012), and that gives readers a financial incentive to switch to digital.
But in spite of the drop in price and increase in sales the available selection is still limited. In 2012 only 54% of all new titles and 29% of publisher’s backlist available as ebooks. Only 53% of German publishers surveyed in 2012 said that they even offered ebooks.
Sure, that is up from 35% in 2010, but half is still a disappointing number.
I wish I had more current industry data than the results from last year; it would give me a better idea of what Amazon is seeing in their sales reports. But I can live with not knowing because as it stands Amazon has lowered the price of the Kindle twice in the past 3 months.
That suggests that Amazon sees Germany as a market worth fighting over. And thanks to Germany's book pricing laws, the only tool Amazon has to fight with is the price of the hardware.
The new price makes the Kindle 10 euros cheaper than the Kobo Mini, or about the same price as the budget models on the German ebook market. Trekstor, for example, sells the Pyrus Mini (4.3" epaper screen) and the eBook Reader 3.0 (7" LCD screen) for 49 euros.
I'm not convinced that Amazon has been losing sales to those cheaper ereaders (aside from possibly the Kobo Mini) because they're not very good. But I do think that Amazon is laying the groundwork for future growth. They're hoping that owning a Kindle will lock in owners, and to some degree they are right.