Quote:
Originally Posted by delphin
Cross subsidized?
This bit of appoligism is commonly used to excuse Sony's lack of competitivness, but it's just SILLY.
Having seen pre-loaded disposable cell phones selling for $20 and NON-'subsidized' 7 inch Android tablets selling for as little $99, it's pretty hard to believe that either B&N, Amazon, or Kobo is losing money on their readers.
And if Sony ran their Reader Store better, they could have had the same 'cross subsidy' advantages as Amazon. They just blew it.
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Saying they subsidize their ereader sales doesn't mean they are selling them at a loss. It means, that they are sellingthem at a MUCH smaller margin, and that they can afford to because of the subsidies provided by the e-book sales.
If their delivered cost is $100, then they can afford to sell them at $139, if they assume an average of $150 in book sales over the life span of the machine. If Sony's cost is $100, and they can NOT count on e-book sales to help subsidize, they can NOT afford to sell it at $139 and remain viable.