It’s an often used marketing ploy: you give the customer 3 choice to help them make the middle decision.
Kindle
Kindle Touch
Kindle Touch 3G
“hmm, the Kindle is only $79. Maybe I will get one. Why not, at that price?” Impulse purchase.
“Kindle Touch is only $20 more, and I get that extra functionality. Would be silly not to. It’s not like I’m getting the expensive 3G one.”
The pricing is complicated a bit by the extra cost of getting one without ads, the continuing availability of the old keyboard Kindle 3s and in Britain they don’t even have the Touch versions available which is interesting. In Britain they also have the price set at £89 which is currently the equivalent of $138.
But if I lived in America and didn’t own a Kindle already I imagine I’d be purchasing the Kindle Touch for $99.
Remove the cheap Kindle from the lineup and, in theory, the number of people purchasing the middle priced Kindle will also fall.