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Old 06-08-2011, 08:18 AM   #68
JohnnyRocks
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Posts: 116
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Join Date: Feb 2011
Device: PocketBook 360
Quote:
Originally Posted by delphin View Post
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.

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.
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