Quote:
Originally Posted by mgmueller
Of course Amazon, Apple, Barnes & Noble and (to some extent) Sony gladly make some profit on the hardware.
Samsung, developing and manufacturing most of its components, should be highly profitable in the hardware arena as well.
But clearly the potential, at least for revenue but in mid term for profit as well, is in the content.
Studies say, Amazon is taking a loss on lots of books for $ 9.99.
Why should they accept this, if not for market share? If they are willing to sponsor for now, obviously there has to be huge potential in this area in the future.
For Apple it's iTunes. For Amazon and B&N it's their respective bookstores and so on.
My personal statistics:
On average maybe $ 400 per eReader. But usually at least another $ 1.000 for content (eBooks, newspapers, magazines, ...) in the very first year after purchasing the hardware. And usually I'm purchasing content from the provider of the hardware.
For Sony it's different since they've moved to .epub as a replacement for their proprietary .lrx format. Quite frankly, I don't quite get their business model. Obviously, Sony is more interested in the hardware. Maybe they have some revenue share from the bookstores to which they link in their reader software. But basically, for Sony readers you can purchase your content "everywhere".
Meaning:
Apple, Amazon and all those others that have various sources of revenue easily can take a hit in a single area. Apple, for example, could reduce their hardware prices and compensate the loss via iTunes. Rumor has it, Amazon has been sponsoring their books heavily for getting (on of the) market leader for eBooks.....
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Good point.
And like you, I am still confused by Sony. Good hardware but can't see a clear business strategy if not tied up to an online bookstore.