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People have to get it out of their heads that Amazon believes it will make serious coin on selling the devices. The estimates of how much the Fire cost to make
by cek 15y ago
People have to get it out of their heads that Amazon believes it will make serious coin on selling the devices.
The estimates of how much the Fire cost to make are hugely speculative and do not account for a bunch of other Amazon's costs, such as affiliates marketing. The pricing at $199 means Amazon's goal is to drive volume. The pricing of the $79 standard Kindle means Amazon's goal is to drive EVEN MORE VOLUME. The pricing of $0 for the Kindle reader on the PC, iOS, Android, Windows Phone, and browser means Amazon's goal is to drive EVEN MORE VOLUME.
Why? Because they monitize by selling content via their cloud service and by delivering an end-to-end consumer experience across MULTIPLE devices.
Stop focusing on the shiny device. I know it's pretty and you can touch it, but the value proposition has shifted. Devices no longer matter (in relative terms). What matters is how an experience can be delivered ACROSS these entities:
experience = people + devices + services
Plural.
- dmix 15y agoI don't know. It seemed to me that everyone was pretty aware of the fact that their not trying to profit on the hardware and that selling content was the main goal. Even when they released the original Kindle, selling ebooks was clearly the main focus and that turned out quite well for them. The story is still relevant in that people are buying them at a rapid rate.
- josefresco 15y agoShhh don' tell Apple that who still makes most of their profit from shiny devices. They also sell content, but it's not the biggest slice of their pie. They may be the lone exception, but a large one at that.
- ceejayoz 15y agoI'd say Amazon's the exception, not Apple. HTC, Nokia, Samsung, etc. aren't making money on content.
- product50 15y agoNot people, but you need to understand that many of us already know this. The point is that the devices are selling. And people will buy content for it. Selling the devices is the first step and that is all this article is saying.
- r00fus 15y agoConsidering that Apple says they barely break even on their content sales (i.e., iTunes/AppStore), I think the strategy is more about staking ground in the tablet space. Kindle Fire is establishing beachhead for it's bigger 10" sibling who will arrive next year... Fire competes and compares favorably against iPod Touch and not iPad. Next year we'll see a real iPad competitor from Amazon.