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Will Amazon Kindles Be Free by November?

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It's amazing how inexpensive a plastic case and a little bit of e-ink have become.

When the original Amazon Kindle debuted in November 2007, it retailed for $399 -- just a hop, skip, and a jump away from a low-end model iPad. Think about that. A largely featureless e-reader -- albeit very solid -- cost almost as much as a sleek, app-heavy tablet computer in 2010. Nevertheless, the device sold out in less than six hours.

By the time the iPad hit the market, the Kindle retailed for a far more modest $189. Even with more storage, a better battery, and a sharper screen, the Kindle is definitely priced for the consumer on a budget. But looking at the Kindle's steady price drop, it appears that the device could soon cost next to nothing -- or literally nothing, in fact.

After plotting four of the Kindle's price points on a graph, analyst Kevin Kelly noticed that the price hits zero around November of this year.

On his blog, Kelly wrote, "I've mentioned this forecast to all kinds of folks. In August, 2010 I had the chance to point it out to Jeff Bezos, CEO of Amazon. He merely smiled and said, 'Oh, you noticed that!' And then smiled again."

Kelly isn't the only one who foresees a free Kindle. Last year, TechCrunch's Michael Arrington reported that Amazon has considered providing Amazon Prime customers with a free Kindle for only the cost of the Prime's membership -- $79/year. Arrington wrote:

"In January Amazon offered select customers a free Kindle of sorts -– they had to pay for it, but if they didn’t like it they could get a full refund and keep the device. It turns out that was just a test run for a much more ambitious program. A reliable source tells us Amazon wants to give a free Kindle to every Amazon Prime subscriber."

The offer isn't out of the question. Amazon recently introduced another perk of the Prime membership. In addition to the free 2-day shipping, Amazon now offers Prime members free movie streaming à la Netflix. And considering Kindle sales now outnumber paperback sales, the online retailer has invested interest to prepare itself for the rise of the digital reader.
POSITION:  No positions in stocks mentioned.