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Originally Posted by Logseman
Maybe I'm overthinking it, but if B&N starts to waver after putting their hardware in a similar price level, it would be very surprising that Amazon is making any profits from a device which uses, e.g, a new screen technology whose R&D needs to be paid off.
If B&N struggles with a price point of $149 for its device and Amazon makes a profit with $139, why did B&N come to the price war in the first place? I think B and N would have known if Amazon was making a profit or not. I'd say B&N knew that Amazon was breaking even at that point, and they made a bold step they didn't imagine Amazon could counter.
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I would guess that it isn't the Nook dragging B&N down but rather the other way around. It's B&N's incredible shrinking profits from their B&M stores that's dragging the company down. For all we know the Nook may be turning a decent profit for B&N.
Connecting B&N's struggles to the Nook's price point, and extrapolating therefor that Amazon can't be making a profit on the Kindle either is just too much of a stretch for me. I could be wrong, but I don't think so.