3 ms·

That doesn't get Amazon any market share, it just increases their profits - assuming that they can get anyone to buy it in the first place. And even if the mone

That doesn't get Amazon any market share, it just increases their profits - assuming that they can get anyone to buy it in the first place. And even if the money starts rolling in, that's not going to be able to overcome the legendary inertia of the Google Play and Apple app stores. Google and Apple already have the "dump billions on it until people buy it" angle covered.

mwfunk 12y ago
Market share is only meaningful if the lack of market share makes a particular product untenable. For example, if someone came out with a new platform that was incompatible with everything else- a lack of apps in the beginning is a huge hurdle to overcome, and the platform may die before achieving a critical mass of third-party support. That is clearly not the case with Amazon. "Just increases their profits" is pretty much the only thing that matters. Dominant market share comes much later, if at all. Dominant market share might even be a bad thing, if attaining it requires a race to the bottom. Most companies would (and should) prefer to sell a million devices with decent margins than 10 million devices with little or no profits. Amazon is known for pursuing market share at the expense of profits, but that's often not the best strategy and they can be excused for not taking it this time. It's also better from a risk management perspective. For the first iteration of a device like this, it's less risky to try to sell a few of them at reasonable margins then to try to sell a gazillion of them at razor thin margins. The price of failure is far less, and depending on how this one does, then the next time around they can start adding cheaper models and gradually expand the user base. Or not, their choice. It's not always worth it.
- brianpgordon 12y ago
  Fair enough. Still, Amazon is already making money. Amazon making money isn't news. The question on everyone's mind is whether this will actually make a difference in the smartphone market.
  - XorNot 12y ago
    Actually its whether this will make any money at all. Amazon shipping a dump truck of money off a cliff is also news.
- nmrm 12y ago
  This sounds like a good description of their approach to the tablet market, actually.

mwfunk 12y ago

Market share is only meaningful if the lack of market share makes a particular product untenable. For example, if someone came out with a new platform that was incompatible with everything else- a lack of apps in the beginning is a huge hurdle to overcome, and the platform may die before achieving a critical mass of third-party support. That is clearly not the case with Amazon. "Just increases their profits" is pretty much the only thing that matters. Dominant market share comes much later, if at all. Dominant market share might even be a bad thing, if attaining it requires a race to the bottom. Most companies would (and should) prefer to sell a million devices with decent margins than 10 million devices with little or no profits. Amazon is known for pursuing market share at the expense of profits, but that's often not the best strategy and they can be excused for not taking it this time. It's also better from a risk management perspective. For the first iteration of a device like this, it's less risky to try to sell a few of them at reasonable margins then to try to sell a gazillion of them at razor thin margins. The price of failure is far less, and depending on how this one does, then the next time around they can start adding cheaper models and gradually expand the user base. Or not, their choice. It's not always worth it.

brianpgordon 12y ago
Fair enough. Still, Amazon is already making money. Amazon making money isn't news. The question on everyone's mind is whether this will actually make a difference in the smartphone market.
- XorNot 12y ago
  Actually its whether this will make any money at all. Amazon shipping a dump truck of money off a cliff is also news.
nmrm 12y ago
This sounds like a good description of their approach to the tablet market, actually.