All of these trends likely guarantee that Amazon will release a $99 e-reader someday. But why do I think it will do so before the end of the year? If the company is already selling out of its inventory at its current prices, what's the point of making the Kindle even cheaper? The quick answer is that tech companies usually ramp up production and lower their prices for the holidays. Last October, Amazon cut the price of the Kindle from $299 to $259. The day after Christmas, it reported that the Kindle was the "most-gifted" item in the company's history. Even so, the Kindle never ran out of stock in December (as it had in 2008). If it lowers the price this October, you can be sure Amazon will make enough to satisfy the demand.Clearly, there are going to be big changes in the Kindle / iPad worlds very soon. And, if the price suits you, go for it.
And at $99, demand will be unbelievable. Last year a Forrester Research survey found that fewer than 20 percent of "U.S. adults online" would consider buying a reader priced at more than $100. When asked about a reader priced under $100, however, nearly 65 percent said they would consider one, and almost 40 percent said they'd buy it within six months. In other words, $99 is a magic price—the threshold where a huge number of customers who are on the fence about e-readers decide to jump in.
However, this evolution opens up the possibly of a two-tiered system: a general ebook reader priced under $100, and then special edition customized ebook readers aimed at niche segments, such as the medical market. Imagine a special Medical Kindle, utilizing Amazon's Digital Ink technology, but in *color*, allowing medical students to have the benefit of crisp text of the current Kindles with the full blown color of the iPad. Color is the next big 'killer app' on the kindle, and with a two tier system, Amazon could justify such a move. Here's hoping the race to the bottom for the $99 Kindle opens up room at the top.
Update: It happened: