Regular readers may recall that over the last couple of years, I've advocated bringing the cost of the eReader to under a $100. Now I'm ready to go even further and suggest a cost of zero. Lest you think I'm crazy, a recent announcement by a British cell phone provider suggests that we may be closer than you think to a free eReader.

My theory was that companies like Amazon and Barnes & Noble are in the book selling business, not the device business. If you give away the device, you do so with an agreement to buy a certain number of books over the next two years. Think of it like getting a price cut on your cell phone in exchange for a two-year commitment to the provider.

Kindle's prices have been marching steadily down for the last couple of years. You can pick up a basic model today at Staples for just $139. The price is reasonable enough that they sold a bunch of them over the last holiday buying cycle. Of course, it's impossible to know just how many they sold since Amazon isn't terribly forthcoming with sales figures.

But $139 isn't the sub-$99 range that Forrester advocated, which triggered my original post back in 2009--until now that it is. PaidContent.org reported last week that a British cell phone provider is offering the Kindle for free with the purchase of certain handsets and a two-year contract.

That's right, they are simply throwing in the Kindle as a value add for going with their service. If that's where the market is going, it would seem it won't be long until Amazon joins them. In fact, TechCrunch reported a year ago that Amazon had plans to give Kindles away to Amazon Prime customers.

That hasn't happened yet, but Amy Garhan, reporting earlier this month on CNN, suggested it would be a smart move for Amazon to go in this direction, and that Amazon's CEO in an earlier interview didn't deny or reject the idea of a free Kindle. He simply smiled.

Meanwhile, you have the Nook, which sits in between the Kindle and the iPad as a combination eReader and tablet. For $250, you get a bit more than you get from the black and white Kindle, which is really focused on reading books and doing it well.

The Nook on the other hand is full color. It has an Android operating system running under the hood. You can access the web and you have a much higher quality screen resolution, but people buying the Kindle and the Nook are probably doing it for one main purpose--and that's to read books.

The iPad is a great device, but it's more of a multi-purpose device with higher end software and of course access to the App Store, which is a huge differentiator if you are comparing it to eBook readers.

The iPad 1 sold more than 15 million units in less than a year. The iPad 2 reportedly sold a million units in the first weekend. A slew of competing devices have either been released or will be shortly. 

Against this backdrop, it's hard to imagine that eBook readers can compete with these more sophisticated devices, and it actually makes little sense to try. What they need to do is create a device with the best book reading experience possible for the lowest price--and you can't get lower than free. - Ron