Will Amazon drop the Kindle's price?

Not long after the iPad was announced back in January, I wrote a column titled, "Which e-readers will the iPad Crush?" For the article, I came up with a list of several e-reader hopefuls that I thought would be most profoundly affected by the arrival of the iPad. Not surprisingly, all of them were more-expensive e-readers with price tags approaching--or even exceeding--the cost of the entry-level 16GB Wi-Fi-only iPad ($499).

You don't exactly have to be genius to speculate that products like the Plastic Logic Que proReader, which starts at $649, will be jeopardized by the iPad's arrival. However, in recent days, as Sony's dropped the price of its 5-inch Reader Pocket Edition from $199 to $169 (for a limited time, it claims), there's been increasing speculation that Amazon will have to respond to Apple's tablet by trimming the price of its own e-reader. And I'm not talking about the $489 DX, which is almost irrelevant at this point; I'm talking plain old Kindle.

Like Sony, Amazon could come down $30 to $229, but the most obvious next stop for the Kindle would be $199. The delta between the iPad and the Kindle would be a healthy $300 and Amazon would generate a lot of interest for the Kindle at $199 (yes, there are still plenty of folks who don't own Kindles). It's worth noting that last year Amazon offered the Kindle to employees of large book-publishing houses for the bargain price of $150. So it would appear to have some wiggle room for pricing.

All that said, you could also argue that for Amazon, the iPad is more of a sheep in wolf's clothing than vice versa. As long as Apple is willing to let Amazon put its Kindle app on the iPad (and yes, Amazon is prepping a Kindle for iPad app as I write this), you might as well consider the iPad the Kindle 3 because it's just another e-reading device that can access the Kindle Store.

Though there have been some strong indications Amazon will add a touch-screen color device to its Kindle arsenal, I believe that the lower end of the e-reader market presents a bigger opportunity for Amazon and where it stands to make the most gains with a Kindle-branded hardware device. At the end of the day, having a $199--or even a $149 or $99 Kindle--is the way to draw in the next layer of consumers into the e-book arena. (Indigo Books & Music just announced the Kobo, a new basic e-reader for $149 that will be carried by Borders starting in May.) A lower price would also turn the heat up on Barnes & Noble, which I'd guess pays more to produce the Nook (also $259) than Amazon pays to produce the Kindle.

So will Amazon lower the price of the Kindle? I say yes, it will. What day, I don't know, but I'm willing to bet it will happen soon. Its last shave was back in October. Six months later, it's ready for another.

What do you guys think? At what price would you consider buying a Kindle if you don't own one already?

Note: For those considering a Kindle purchase, Amazon does have a 30-day return policy.