The current rumors about a free Kindle are still going around (I was hoping they would have died faster than this), with CNet getting into the fray yesterday.
But the good thing about the rumors still being around is that I came up with another argument about why it won't happen:
Michael Tamblyn of Kobo Books gave a presentation at the O'Reilly TOC conference a few weeks back. I just came across the slides for his presentation a few days ago and it turns out Kobo have been doing some serious analysis on their customer data.
They've broken their customers down into 4 broad groups, and there's one in particular that is relevant to this discussion. (You can find the slides at the end of the post.)
Freegans are a type of customer that don't buy ebooks - ever. They read the ebooks on the Kobo website or use one of the free apps, and they only download free ebooks. Most will have 9 or more free ebooks in their library.
Before anyone at Kobo gets upset, let me add that I've thinned the data down a lot. But that does not change my point. Kobo have solid data that shows some customers won't buy ebooks.
Even if you give them a free ereader, they still won't give you any money. This customer will only go for stuff that's free. If the Kindle is free, I believe virtually all freegans will get one. Then Amazon will be out the nominal $139 with no hope of recovering the cost.
I know everyone is in love with the idea of a free Kindle, but I really don't see how it's going to happen.