Amazon to barely profit on Kindle Fire hardware



Amazon to barely profit on Kindle Fire hardware.

[newsimage][/newsimage]The big debut of Amazon's Kindle Fire tablet drew oohs and aahs not only because the device is a huge leap over the company's previous Kindle e-reader, but thanks to its shockingly low $199 price tag. According to analysts at IHS iSuppli, the company is hedging its bets with the entry price in the hopes that more Kindle Fire owners means more money spent online.

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That’s a pretty common business model. We’ll give you the razor because you’ll buy blades…We’ll give you this Ink-Jet printer…Want a free Smart-Phone?


[QUOTE=olyteddy;2606174]We’ll give you this Ink-Jet printer…[/QUOTE]

I still remember the time I seen Dell selling an entry-level printer for £9. Only problem here is that I remember people complaining about the £27 ink cartridges it took, until someone said something like “Who cares! Buy a new printer each time the ink runs out :)” and another comment saying “I bought 5 printers to save on postage, but I’ll rob the ink of the other 4. 3 will go straight to the recycling centre and keep one as a spare.” A few weeks later, the Dell offer ended and Inkjet printer prices returned to roughly the cost of a full set of consumables to end the loophole.

With the Kindle Fire, I think Amazon is careful here to prevent customers exploiting such a loophole, e.g. not giving away vouchers, free subscription, etc. that add up to more han the price of the Kindle Fire. :wink:


I look at it this way: Amazon is putting a gizmo in your hand that is little more than a delivery device for advertising, and they’re getting you to pay for it. Not only that, they convince you it’s “cheap” and FUN!!!