Amazon's New Ad-Supported Kindle Will Start Shipping Tomorrow
Amazon said during its first-quarter conference call this afternoon that it will be shipping its new Kindle with Special Offers nearly a week early.
Originally, the new Kindle was supposed to be available on May 3, but Amazon’s SVP and CFO Tom Szkutak confirmed that it will start shipping tomorrow.
The device, called Kindle with Special Offers, comes at the lowest price yet at $114, which is $25 cheaper than the Wi-Fi-only version.
While the hardware on the new e-reader is identical, it’s cheaper because it is being subsidized by advertising. Initially, sponsors include General Motors, Proctor & Gamble and Visa.
“The team did a nice job of moving the dates up,” he said.
The e-reader will be available from Amazon, Target and Best Buy.
While the new price only represents a drop of $25 (and Amazon promises the device will never be free), it will likely drive additional sales of the already popular e-reader. Sticking with tradition, Amazon did not disclose how many had been sold to date. “We are incredibly excited with Kindle because we see that customers are buying a lot more books….We continue to invest in that business,” Szkutak said.
Also during the call, Amazon hinted at how fast its physical retail sales are growing. Szkutak said it may build more than the nine distribution centers it had been planning on building this year. Already, one has opened, and about five are expected to be based in North America with the remainder opening up internationally.
Analysts watch Amazon’s investments carefully because it affects the company’s profitability. Right now, it is investing heavily, leading first quarter profits to fall despite a 38 percent surge in revenues year over year.
Separately, the company said revenues were hurt internationally by the earthquake in Japan. Had it not been for the natural disaster, it said international revenues would have grown by 32 percent instead of 27 percent.