Amazon drops Kindle 2 price to $299 as of today

The Kindle 2 price was dropped by Amazon from $360 to $299 today.

UPDATE 7/8/09 - 11:32 PM at bottom of this article cites various statements about the reason for the price change, which is not short-term.

I checked the comments areas in a few places, and people who just recently bought Kindle 2s (within the last 30 days, since one can return a Kindle within 30 days for a refund anyway if not interested in keeping it) are being given $60 refunds when they request one.

The phone number for Kindle customer service is 866-321-8851.

This puts the price close to or even below competitor 5" to 6" models just coming out this month without the annotation, inline-dictionary, search, and 24/7 wireless features.

I haven't seen an Amazon statement yet but will write more when I see more. [See later updates below.]

UPDATE - July 8, 2009, 6:02 PM (Original posting at 5:18 PM)
I have seen blogs again repeating the erroneous "DRM" issue* report that made the blog rounds a few weeks ago, based on a conversation with a first-tier customer service rep that there is a limit on the number of times a book purchased from Amazon can be downloaded.  The customer service representative's information was wrong. The limitations policy, readable at the Kindle Amazon support pages states

"
[Q]  How many Kindles can I use to access titles in my library?

[A]  Most books and other non-subscription items you purchase from the Kindle store may be simultaneously accessed for your personal use on to up to six Kindles (or Kindle compatible devices) registered to your Amazon.com account.

If you reach the device limit and wish to replace one of your current devices with a new one, you must first deregister and delete the content from the device you wish to replace before you can access the content in question from your new device. Please see the "Registering Your Kindle" section of our Managing Your Kindle Settings Help page to learn how to register/deregister your Kindle.  There is no limit on the number of times a title can be downloaded to a registered device.

Subscription content can only be downloaded to one Kindle at a time, and only the seven most recent issues will be available for redownload from your Kindle or from the Manage Your Kindle page.
"

This policy has essentially allowed up to 6 Kindles belonging to one account holder, to share a book. The devices sharing include a non-Kindle device such as the iPhone or iPod.  The word "most" allows for exceptions but in a year of participation in many Amazon Kindle forum, the only time I've seen customers actually coming up against the 6-device limit was when defective Kindles returned still had a license registered by Amazon for it and these were removed upon request by the customer.  I have said that Amazon should automate the license removal on any returned Kindles.  Of course, families with many Kindle devices sharing an account will run up against the 6-device limit more readily than one person will.

With periodicals and subscriptions, there is a limit of 1 device at a time rather than 6 and there is a time limit by agreement with periodical publishers on when Amazon is allowed to keep the old issues redownloadable (or successfully transferrable).
  One cannot download issues older than that time from your Amazon Kindle management area nor move an older issue from an older Kindle to a newer one, which I have found the one real 'DRM' issue in that you certainly don't 'own' your magazine issue if it's older than 7 or so issues and you want it to be displayed on a newer Kindle you bought when you no longer have the older Kindle.  Because Amazon has made no Amazon procedure possible to change the device ID given a magazine/newspaper license, it can't be displayed on the new device (without resorting to cyberspace utilities that can remove the device-ID field info, information that of course Amazon strongly discourages forums or blogs from linking to, as copyright concerns are an issue, but if anything should happen to Amazon, at least we know there are workarounds).

---

UPDATE - 7/8/09 - 11:25 PM
The NY Times blog gave this reason for Amazon's decision to drop the price on the Kindle 2.

In an e-mail message, Andrew Herdener, an Amazon spokesman, said the company was passing on savings to consumers from the increasing volume of Kindle sales and the decreasing costs to manufacture the digital reading device.

Amazon’s jumbo-size Kindle DX, which it introduced in May, remains $489 and is currently out of stock on the site.

AP reporter Rachel Metz quoted Amazon's spokeswoman Cynthia Portugal:

Amazon spokeswoman Cinthia Portugal said the price cut, a classic move in electronics marketing, is not just a short-term promotion.

"We've been able to increase the volume of Kindles we're manufacturing and decrease the cost of doing so," Portugal said.

ThinkEquity analyst Ed Weller opined for AP that

[The $299 price] "feels like a much hotter price" than $359.

"They'll sell more of them, and they'll sell more books," he said. He doesn't expect Amazon to follow the Kindle price cut by raising digital book prices.

"DRM" - Digital Rights Management