Report: Kindle Could Cost Under $150 Thanks to Chipmaker

Amazon’s Kindle e-reader could cost less than $150 after the device’s chipmaker, Freescale, said it will produce a more efficient design streamlined for the gadgets. The new chip should take about six months to reach its two largest users: Amazon and Sony, reports say Monday.

“We do see the price of e-readers coming down this year, and Freescale is trying to facilitate that. That’s a lot of what this chip is doing,” Freescale’s marketing head Glen Burchers told Bloomberg. The Kindle currently costs between $259 and $489 while Sony’s devices costs between $199.99 and $399.99. Apple’s iPad, unveiled last month, is priced at $499-$699 and use Apple’s own chip design.

The new Freescale chip would cut costs by $30 and reduce the number of processors e-readers require. Both the Kindle and Sony’s e-readers use separate chips to control the E Ink display to give consumers the familiar look of type on a printed page. The new chip could also reduce the time it takes to turn a page from two seconds to under a half-second, the report said.

A new chip would be just the latest adjustment Amazon has made to counter the buzz that’s built-up around the yet-to ship iPad. Last week, the Seattle-based online retailer and software giant Microsoft signed an intellectual-property sharing deal that could result in a ‘KindlePad,” one analyst suggested. Amazon has also begun giving free Kindles to its best ‘Amazon Prime’ customers as a way to even the playing field with the iPad.

Physically, the Kindle has also morphed to meet the iPad’s challenge. The company announced support for applications on the Kindle, an obvious response to Apple’s popular App Store that will be used to distribute iPad content. In other moves, Amazon’s Kindle will likely gain a color screen after an earlier announcement of a slimmed-down size, giving the unit an iPod-like profile.

Although Amazon has been reticent to provide specific Kindle sales figures, a recent comment by CEO Jeff Bezos that ‘millions’ of people own the e-reader prompted the report that 3 million Kindles have been sold since the product’s introduction. Most worrying, however, may be an analyst’s prediction that Amazon’s share of the e-book market by 2015 could shrink to 35 percent from the current 90 percent.

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[via Bloomberg and SAI]

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