Sold at a $10 loss, which Amazon will recoup off about three eBooks over the lifetime of a device. My immediate thought was 'Why isn't everyone (being doing th

Sold at a $10 loss, which Amazon will recoup off about three eBooks over the lifetime of a device. My immediate thought was 'Why isn't everyone (being doing this?', and then I read of fears of a pricing war at the lower end of the tablet market. But that's not going to happen, and here's why. Samsung and HP aren't retailers. People don't (almost without exception) buy direct from them. You don't visit Samsung.com and order a Tab. You buy them at other retailers like BestBuy and (lol) Amazon. So Samsung have to add another hefty cost on top of their manufacturing cost - the retailer's margin. Bestbuy don't want to be stocking shelves full of Galaxy Tabs, littered with merchandising, for the lure of 3%. They probably didn't much fancy the HP Touchpad either, and look how that turned out. (They'll stock Apple goodies for wafer-thin margins though, because it brings in affluent customers and looks good in the store.) Amazon are going to be playing on their own at the $200 price-point - not only are they the only player who can subsidise devices with future content sales, but they can distribute them for virtually nothing. $1 to UPS and your Kindle is on its way. But there's a big multicoloured elephant in the room waving it's trunk around. Yes, it's Google. And they've got neither manufacturing, nor retailing, nor future content sales. But they're big and rich and a bit mental. -- Also posted at http://www.alexmuir.com/2011/09/why-apple-and-amazon-are-contenders-but-samsung-and-hp-arent/ http://www.alexmuir.com/2011/09/why-apple-and-amazon-are-con...