Ironically, there is one market research firm who also thinks Amazon and B&N are making zero profits on hardware:
http://www.twice.com/article/454160-..._Price_War.php
Quote:
Barnes & Noble and Amazon dropped the prices of their 3G-equipped e-book readers because of competition with the multifunctional iPad, driving down the two companies' e-reader gross margins from around 20 percent to around the break-even point, iSuppli said.
As a result, the two companies' e-reader business models will emulate the video game industry business model, iSuppli said. "With zero profits on their hardware, both these companies now hope to make their money in this market through the sale of e-books," explained William Kidd, iSuppli director and principal analyst. "This is the same 'razor/razor blade' business model successfully employed in the video game console business, where the hardware is sold at a loss and profits are made on sales of content."
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