Quote:
Originally Posted by Kali Yuga
I doubt they're earning much, if anything, on the hardware -- margins are too thin. It's the ebooks themselves that are generating profits.
I don't see why, other than as a convenience for US customers. I don't believe they have a big international presence, and the ROI on international is likely much lower than domestic sales.
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As you said: hardware margins are thin.
Thin-margin businesses are by definition high volume businesses.
Amazon sold 8 million kindles in 2010 because they are a worldwide player and the cheapest connected reader around. And one reason they are so cheap is because they sell so many readers (and books) the world over. Development costs are fixed, so are back end costs; spreading them over a large volume is the most competitive way to beef up margins.
Amazon is not going to stop international operations any more than Kobo is so if B&N is serious about playing with the big boys they need to follow suit.
Kindle 4 is coming so anybody who is serious about staying in the game needs to get within striking distance of K3 before then. Or else.