Given what Nate has said about the risks of relying on Wall Street Journal stories for anything, it’s tempting to let this story pass, but all the same a piece in the Journal yesterday about the impending Kindle Fire launch piqued my interest. The Journal claims to have heard from inside sources that Amazon will be launching an ad-supported Kindle Fire to go with the ad-supported e-ink Kindles it already offered.
There has been talk of such possibly happening in the past, but this seems to be the first claim that it actually will happen rather than simple speculation. If this is true, and if Amazon (or CNet’s source) is counting an ad-supported version as a “separate” new device, it might explain why Nate was unable to find any FCC paperwork about a second Kindle Fire device—there isn’t one, because it’s the same device as one that already exists. Thus, the “slightly revamped version of the original tablet” from the CNet article might be “revamped” by adding ads to it so as to chop the price.
Slapping ads on the e-ink Kindles was a rather canny move on Amazon’s part. Among other things, it enabled Amazon to move the goal posts and force an apples-to-oranges comparison of its ereader prices: the ad-supported price became the new “default” price, making the Kindle appear that much cheaper than the cheapest non-ad-supported price its competitors could field. Furthermore, many (most?) people who tried the ad-supported tablets found they quite enjoyed the ads—Amazon placed them deftly and sensibly in ways that didn’t interfere with the experience of reading and thus were, for the most part, not annoying to consumers in the way that so many web ads are.
Could Amazon do the same thing with tablets? I wouldn’t have thought the company could do it so well with ereaders before it went and did it, so I’m not about to say no. And the Kindle Fire was already one of the least expensive tablets on the market. If Amazon could knock $50, or even $25, off the price with a few unobtrusive ads, it could make the Kindle Fire even more attractive to tablet fans on restricted budgets—especially if Amazon combines it with a price drop on the older Kindle Fire hardware when the new one comes in.