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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RE: Not sure how well that model works
10/13/2012 5:45:22 PM
Apple does it. Their profit margins on hardware would make even a Saudi oil sheik smile. The appstore is icing on their profit cake. :P
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