Kindle Fire HD, Kindle Paperwhite Hardware Generate No Profit for Amazon
October 12, 2012 9:01 AM
comment(s) - last by
No Profit for you! Profits come with content sales not hardware at Amazon.
A lot of technology products and gadgets are sold at breakeven and at times even at a slight loss in order to make money off accessories or services the go along with the products. This is the case with the new
Amazon Kindle Fire HD
and Paperwhite devices.
"We sell the hardware at our cost, so it is break-even on the hardware," chief executive Jeff Bezos told the
Bezos notes that Amazon's plan for making money off digital content rather than the devices themselves has worked so far. Bezos says that the user tends to consume more digital media once they own a Kindle or a Fire tablet.
"What we find is that when people buy a Kindle they read four times as much as they did before they bought the Kindle."
"But they don't stop buying paper books. Kindle owners read four times as much, but they continue to buy both types of books."
Along with these new gadgets, Amazon has also recently announced the roll out its book lending platform in Europe. Users of Kindle devices in the UK, Germany, and France can now access the Kindle Owners Leaning Library.
This library allows users to borrow up to one book per month from a selection of titles, some of them very popular titles, at no cost. At launch, the UK service will feature over 200,000 digital books.
Amazon is launching the Fire HD tablet and the Paperwhite eReader in Europe on October 25.
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10/12/2012 11:19:05 AM
Apart from being a toy, it's just a gateway to buy things on Amazon.
Step 1: Make it more convenient for users to get to your website
Step 2: ???
Step 3: Profit
They'll make plenty of money from the new Kindles.
10/13/2012 11:59:53 PM
It may be a gateway to buy from Amazon but the Kindle e-readers are not toys. The new Kindle Paperwhite is my favorite tech gadget in a very long time, it such an excellent piece of hardware. A+++++
The Fire is another story, not the best hardware and it has limited tablet targeted software even by Android's meager standards.
As for making money, they won't make much from media but the "portable billboard" aspect will probably help them indirectly in other ways. If you're carrying ads for Amazon on your person, it makes you that much more likely to buy something from them.
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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