Thursday, September 29, 2011

Amazon emulates deceptive airline pricing

Amazon introduced some new e-readers Wednesday that increasingly look like tablets. The color version, the Kindle Fire, looks a lot like the other 7" tablets out there — with Android and a (modified) WebKit browser. (And like Barnes & Noble, it’s a locked down Android rather than a real Android experience). Jeff Bezos even played the Steve Jobs role, albeit with a collared rather than mock-turtleneck shirt.

As befitting a commodity product category, what’s notable is the aggressive pricing, lower than any previous Amazon or Barnes & Noble product in these categories. The color tablet is hundreds lower than the 7" Android tablets, threatening the (already dubious) future of these products from RIM, Samsung and others.

The Kindle Fire is $199, challenging the existing (and largely unknown) 7" nookColor at $249 both on price and a wider range of content. B&N's Silicon Valley lab is working on a replacement, also due for the Christmas season.

However, for the rest of its products (the black & white e-ink models), Amazon has adopted deceptive pricing worthy of a major American airline, starting with the rollout photo taken by ZDNet:

[Bezos slide]

and continuing with the pictures on the Amazon website:

The problem is, these are the product prices With Spam® — continuing the Orwellian name of “Special Offers”. The actual prices are $30-40 higher:

ProductPriceWith Spam®
Kindle Touch$139$99
Kindle Touch 3G$189$149
Perhaps Amazon truly hopes it will become an advertising-driven powerhouse to someday rival Google. My suspicion is that — like the airlines — this is just a form of bait-and-switch deceptive pricing that so far seems to be working.

How will countless Americans feel about getting a spam-infested e-reader under the Christmas tree this December, all because their loved one was too cheap to buy the real thing? Or will gift-givers be drawn in by the deceptive prices, and then spring for the real product? How much longer will the media enable this deception — describing the features of the spam-free products but touting the low prices of the spam infested versions?

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