Quote:
Originally Posted by OtterBooks
People don't seem to know whether Amazon is making a profit on the device or not. One day I'll hear Amazon makes tons of revenue from hardware and another I'll hear they're taking a loss in order to sell content. I never see either claim cited with hard facts.
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The simple answer is that Amazon doesn't break out hardware sales from their earnings, along with profit/loss figures, so everyone is in fact guessing.
I do know that
as of 2009, Bezos made clear he was not interested in selling the Kindle at a loss, unless customers demanded it:
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But, Bezos told Wired’s Steven Levy at Wired’s Disruptive by Design conference in New York, it’s cheaper in the long run for customers to pay something akin to the actual cost for hardware. And fees and minimum purchase requirements create friction.
“We did consider [the cellphone model] for Kindle,” Bezos said in an interview with Wired’s Steven Levy at Wired’s Disruptive by Design Conference in New York. “Instead of driving the cognitive complexity of a two-year commitment, [we] just tell people, ‘This is the actual cost of the device,’” he said.
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Of course, the price has dropped since then.