$50 Kindle eReader by Christmas? Free by Next Summer?

All Things D’s Peter Kafka quotes Citigroup’s Mark Mahaney as predicting: Mahaney thinks they’ll be below $100 by Christmas, and that seems like a very conservative guess.

Kindles Getting Cheaper, and Huge: 10 Percent of Amazon’s Business Next Year

This is based on Citi’s Kindle ereader price tracking since its debut in late 2007. The line graph All Things D provides in their article looked like a very linear relationship between time and the Kindle’s price. So, I applied a simple linear regression trend line to Citi’s price data to get an admittedly simple-minded projection. However, if Amazon follows a price pattern they have demonstrated for the past few years, it might be a reasonable projection.

The lowest Kindle ereader price is represented by the blue line. The current lowest priced device is the $114 advertisement supported WiFi-only model. The projected price is the red line. It is not a perfect fit. However, it is a reasonably good one. The trend indicates that the lowest price Kindle should be around $50 by the 2011 holiday season. Even more interesting is that the trend line cross the zero point (free Kindle) around June 2012.

While these projections may seem implausible now, consider this: Who would have though the Kindle would be as close to $100 as it is now back in 2007? I took a lot of heat for suggesting in 2009 for suggesting that the Kindle price needs to be between $100 and $150 to get mass purchases by casual readers like me. And, yet, that is what appears to have happened since the WiFi-only Kindle’s appearance last summer priced at $139 and, more recentl, the ad-supported unit for $114.