kindlepriceforecast2Could Amazon be offering the Kindle free by the end of the year? Kevin Kelly, former editor of Wired, thinks so. He points out that an analyst charted the decreases in the Kindle’s price over the last two years and projected that it could be marked down to nothing by November of this year. Kelly notes:

Since then 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 thought that Amazon might operate on a cell phone model where you get a free Kindle if you commit to buy X number of e-books (funny, I would have called that the book club model instead), then he noticed that Michael Arrington once brought up the idea (we covered it at the time) that Amazon Prime subscribers might get a free Kindle.

Though he misdates Arrington’s post as a week ago rather than a year and a week ago (nice to see I’m not the only one who does that!), that doesn’t make the idea any less valid; Bezos has a history of thinking in the long term. And the recent addition of free video streaming for paid Prime subscribers shows Bezos is definitely thinking in terms of ways to add value to Prime membership. (Or to, fellow Transformers fans forgive me, “optimize Prime”.)

And it’s not so far-fetched. Prime subscribers tend to order more frequently since they don’t have to factor shipping charges in, and to shift their purchases away from other sources to Amazon out of a psychological need to “get their money’s worth” out of that $80 they put up. If Bezos gives more people reasons to sign up, the added value overall could let Amazon give every Primester a Kindle and still come out in the black—especially if the cost of making them continues to drop.

I’ll say this for sure: if I got a complementary Kindle plus streaming movies and no-cost 2-day shipping out of it, I’d sign up for Prime in a heartbeat, and try to talk all my friends into doing it too. Even if it was just the wifi version, and/or a refurb of last year’s model, that would still be enough added value to put it over the top for me.

Perhaps a more interesting question is whether this sort of marketing coup would convince Barnes & Noble to follow suit. Certainly it’s not been shy about matching Amazon’s price decreases as closely as possible—or even lowering its own prices first. If free or subsidized e-readers start popping out all over the place, that could strike a pretty critical blow to the market for the also-rans that don’t have a huge bookstore chain behind them.

(Found via Novelr.)