We saw an interesting Kindle price drop projection by KK.org last month the showed the Kindle would be free by this November if its price followed their linear regression’s trend model.
While it is easy to dismiss this as a inappropriate assumption based a simple linear regression equation, KK also provided a reasonable theory of how Amazon could give the Kindle away: Give it away with a subscription to their pre-paid next day shipping service – Amazon Prime ($80).
paidContent provides an actual example of bundling a Kindle with the sale of another product in the UK.
The deal from the UK’s Carephone Warehouse bundles a free WiFi-only Kindle ($139 in the U.S.) with the purchase of a phone with a two-year contract.
This brings us back to a possible U.S. “free” Kindle scenario. Bundling a WiFi-only Kindle with an Amazon Prime subscription is a good idea. Providing Kindles to Amazon Prime customers would reduce shipping to those customers assuming that books (a heavy per cubic inch object to ship) is a frequent shipping item. People often simply let subscriptions go on forever. So, encouraging the first sign-up to Prime using a Kindle as a lure would kickstart that habit and provide Amazon with an annually renewed shipping fee cash float.
I think it is likely that Amazon will bundle the Kindle with their Amazon Prime service before the end of the year. They have already tied it to their streaming video service. They could even charge a small premium for an Amazon Prime Plus service that provides the pre-paid shipping for $80 and the Kindle for $50. The $130 total would be a $10 discount off of buying the Kindle alone.