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Behind Amazon's Kindle price drop

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Mark Lennihan/AP

(Read caption) The Kindle 2 at an Amazon.com news conference in New York Feb. 9.

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By now you've probably heard that Amazon quietly and without fanfare dropped the price of its Kindle e-book reader on Tuesday. The device can now be had for $299, down from $359.

As soon as the story hit, tech news outlets were scrambling to make sense of the move, not taking at face value Amazon's explanation that an increase in production volume has allowed them to pass savings on to the consumer. After all, the Kindle 2 was only just released five months ago, and such an early price drop seems unusual.

Channel Web's Chad Berndtson, in two posts about the announcement, reminded us that this is the first price drop in the Kindle's history. He also speculates that sagging sales and the crowded e-book market have caused Amazon to make the cut to better establish itself as the first name in e-books. (But Amazon hasn't disclosed sales figures for the Kindle or its larger-screen Kindle DX, making such claims hard to substantiate.)

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