Originally Posted by judyz
I'm so glad that Sony, Kobo, Nook and Amazon are so Charitible as to offer us their devices without making any profits. Their shareholders must be really nice people. LOL. Margins might be a bit slim on the hardware but please don't be fooled. There is a lot of creative accounting going into those statements. For instance it depends on the number of financial years you spread the development costs over. There is a profit with every sale. There is no way the materials cost ads up to more than the MSRP on these devices.
The $40 case is made out of plain old fabric. For $10 more you get leather. After 6 months of daily use and carrying it in my purse I will be wishing I had spent the extra $10. Fabric just doesn't stand up to use like leather.
Kobo has made a huge mistake not getting the covers out with the hardware and overpricing them. If they cut $10 off the MSRP of both covers and had them sitting with the devices on the shelves two weeks ago they would have sold a ton of them. Even at a $30 price point for a fabric cover (and $40 for leather) cost per unit would be easily under $10 so they would be making good money.
As it stands the cases are still not in the stores and the GLO's out there that are being used without cases or with improperly fitting cases are going to end up with scratches that show oh so nicely on their light up displays.
I just went to a Coles - they're saying the covers might not be available until mid-November now. Originally, the cover release date was (tentatively) October 14, the same day as the Kobo Glo/Mini official release. Now...
And judyz, Amazon has gone on record saying that they sell the hardware at no profit, or at a loss, since they make their money on the book/audiobook/media sales, just like razor companies do on razor blades. And I'd like to find out where you're getting the cost-per-unit, as well as your calculations (including the costs of tooling, factory time, shipping, customs, etc) to figure out they'd get a $10 cost per unit. I'd be throwing in at least another 50 cents for the magnet, for example. Not sure what sort of reject rate they've got on the manufacturing side, which the COGS has to cover as well.
And given this most recent delay... that's got to be a really damned high rate of failure/rejection. About the only part of your post in which I'm in agreement with is that they should've had those cases out the day they started shipping devices, just to get a nice add-on sale. As it is, this appears to be another Kobo launch problem; just like the Vox shipping issues from the last round.