Amazon Launches Ad-Supported Kindle For $25 Cheaper (AMZN)

Amazon has found a new way to make its Kindle e-book reader even cheaper: It will start shipping a new edition next month that is supported by advertising.

The new Kindle with Special Offers will sell for $114, or $25 cheaper than the $139 Kindle, and will ship on May 3.

The ads and special offers will show up as full-screen screensavers on the Kindle device and as small banner ads at the bottom of the Kindle home screen.

Existing Kindle owners will not see any ads, and Amazon will continue to sell ad-free Kindles. This program is starting from scratch, only on this new, cheaper Kindle device. So advertisers will be buying a market of zero devices right now.

Luckily, Amazon itself can seed the device with offers for its own products and services. (Some potential deals Amazon suggests could include 50% off Amazon gift cards, $1 Amazon MP3 albums, etc.)

And as Russ Grandinetti, Amazon's VP of Kindle Content, told us this afternoon, Amazon has seen Kindle sales continue to rise as it has made the cost of the device cheaper. And Amazon has big hopes that this cheaper device will sell very well, creating a large potential market of ad viewers.

The company is also working on an app called "AdMash," which will allow Kindle owners to vote on which ads they prefer. (Sort of like Mark Zuckerberg's original web project, "Facemash.")

Will people opt for this slightly-cheaper Kindle in exchange for a lifetime of ads? Will Amazon eventually be able to sell enough ads and deliver enough impressions to make the subsidy more than $25? (About 2,500 impressions per device at a $10 eCPM, or effective cost per 1,000 impressions.) Will an ad-supported 3G Kindle ever exist? We'll see.

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Amazon Launches Ad-Supported Kindle For $25 Cheaper (AMZN)

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Samsung's Wifi-Only Galaxy Tab Will Be Cheaper Than The iPad

Samsung will start selling a wifi-only version of the seven-inch Galaxy Tab on April 10th, the company announced.

This week Sprint and Verizon started subsidizing the 3G version of the Tab down to $200, but you need to sign up for a two-year contract to get the deal.

Considering that the Galaxy Tab only runs Android 2.2 Froyo -- not the tablet-optimized 3.0 Honeycomb -- and is less powerful than tablets like the iPad 2 and Xoom, this seems like a good deal.

The new price is already $150 cheaper than the the 16 GB wifi-only iPad 2 and has double the storage.

Along with the Xoom, the Galaxy Tab is one of the only decent competitors for the iPad. At this price, it may finally entice people to choose Android over Apple.

Before you pull the trigger and buy one right away, keep in mind Samsung will have two new Honeycomb-powered tablets this summer, the Galaxy 10.1 and Galaxy 8.9. Both will be lighter and slightly thinner than the iPad 2.

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• Now You Can Buy Samsung's Galaxy Tab For Just $200 From Verizon And Sprint
• HTC's EVO View 4G Will Be The First 7 Inch Tablet To Run Honeycomb
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Samsung's Wifi-Only Galaxy Tab Will Be Cheaper Than The iPad

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Comment on What a Cheaper iPhone Would Look Like by Sam

I doubt Apple would drop the gyroscope--it's the motion sensor and thus used heavily in games. They could reduce the number of axis back down to what was in the original iPhone, but I'd guess this would be saving pennies, not dimes. The compass is nice to have but not necessary for basic GPS--on the other hand, removing the compass would impact some saugmented-reality applications and also probably would not save much. Saving on the screen by using old iPhone resolutions would make for a very simple bifurcation--Retina displays for their high model and standard display for the low model. Another way to save on the display would be to use a less expensive LCD technology than IPS.

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Apple COO Hints At Cheaper iPhone, Saying, We Don't Want To Be For "Just The Rich" (AAPL)

Apple COO Tim Cook strongly suggested we will see a cheaper iPhone in the near future in an interview with Bernstein analyst Toni Sacconaghi.

Cook says Apple is doing "clever things" to attack the prepaid market, because he doesn't want Apple to be "for everyone," not "just for the rich." Cook also recognizes "price is big factor in the prepaid market," but Apple is not "ceding any market."

He also says Apple has been driving into China which is "a classic prepaid market."

Add it all up, and sure sounds like Apple is ready to drop some sort of cheaper phone to open up the markets it can address.

One other thing of note from Sacconaghi: He says Apple CFO Peter Oppenheimer said Apple would not let carriers dictate terms, which Sacconaghi says reinforces, "the notion that Apple might be willing to act to disintermediate carriers with a soft-SIM."

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Apple COO Hints At Cheaper iPhone, Saying, We Don't Want To Be For "Just The Rich" (AAPL)

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AT&T; Making Text Messaging Cheaper As Free Text Messaging Apps Get More Popular (T, VZ, AAPL)

AT&T plans on changing its text messaging rates next week according to a leaked screen shot obtained by Andru Edwards at GearLive.

The new rates will be $10 for 1,000 messages, or unlimited messages for $20. (If you go over your $10 allotment, you have to pay $0.10 per message.)

Previously, the plans were $5 for 200 messages or $15 for 1,500 messages.

Why the switch? Because it's getting easier than ever to avoid paying for text messages. Whether it's through Google Voice, IM, or any number of apps available for Android or iPhone.

Those apps are disrupting the texting business model. (It hardly costs a thing to send a text message, but carriers still charge outrageous rates.)

To deter any customers from switching to free texting options, it's smart to try and lock them in with decent rates. Especially since it's infinitely easier to use the built in text app than some third party option.

The new text plans are supposed to take effect January 23.

Don't Miss: Don't Buy The Verizon iPhone Yet, Unless You NEED A New Phone ASAP

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• CHARTS OF THE WEEK: Why The Verizon iPhone Is Bad News For Google
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• Don't Buy The Verizon iPhone Yet, Unless You NEED A New Phone ASAP

AT&T; Making Text Messaging Cheaper As Free Text Messaging Apps Get More Popular (T, VZ, AAPL)

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