Since its November 2007 launch, the Amazon Kindle reader has been a great product for the company. The strong association that Amazon has with both books and electronics makes it the perfect product for their business model. After the release of the upgraded Kindle 2.0 in February of 2009, followed by the release of the large display Kindle DX model in the summer of the same year, the Kindle went on to become Amazon’s best selling product.

During the 2009 festive season, the Kindle became Amazon’s most gifted product ever. On Christmas day 2009, Amazon sold more Kindle books than they did physical ones for the first time. In all probability this would have been due to people who had got a gift of a Kindle downloading a book or two to try it out. Nevertheless, it was a noteworthy event for both Amazon and the Kindle.

Amazon did seem to be a slightly reluctant manufacturer on occasions however. They seemed to bend over backwards to ensure that Kindle books could be read by people who didn’t have Kindles. At the moment, Amazon has released free Kindle “Apps” for a wide variety of different devices – many of which would be viewed as competitors of the Kindle. These include the PC, the Apple Mac, the Blackberry, the iPod Touch, the iPhone, the iPad and any device running Android. Amazon looked to be their own competition at times.

However, the reasoning behind Amazon’s open policy became clear with the release of the Apple iPad. Among its many features, the iPad can be used to read e-books, and the price of e-book readers went into free fall as Apple enthusiasts rushed to get their hands on Apple’s new device. However, even as e-book reader prices were plummeting, the average price of the e-books for use with them was climbing.

Prior to the release of the iPad, Apple had negotiated a deal with the major publishing houses which allowed them to set the price of the e-book editions of their publications at pretty much whatever level they liked. The only rider was that the same e-book could not be offered at a lower price for any other reader – Amazon’s Kindle for example. Up until that point it had been Amazon’s policy to price e-books at $9.99 or less. Apple’s deal, much to the delight of the publishers, pretty much blew that out of the water. At first glance, Amazon looked to have been hit pretty hard by the release of the iPad.

However, upon closer inspection, it becomes clear that Amazon’s policy of releasing free Kindle Apps for just about every device known to man was a master stroke. Each App is nothing more than an outlet for Kindle books and, given that the price of these is increasing, Amazon can now afford to drop the price3 of their Kindle reader hardware secure in the knowledge that they will make a profit from the sale of e-books over the lifetime of the reader. For that matter, even if the iPad – or any other reader – seriously dented the sale of Kindle readers, Amazon would continue to sell their Kindle books.

Learn more about Amazon’s Kindle reader for yourself and check out the wide range of Kindle accessories available to help you personalise your reader.