Quote:
Originally Posted by ZodWallop
Kobo I can understand. Amazon a little less. When you have 70% of the e-book market, I'd think the Kindles could almost be loss leaders. Though I guess profit is always better than not profit.
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Amazon prefers their individual units be profitable. Losses are a bad habit they discourage almost as much as Empire-wide reportable profits. They generally price their hardware at prevailing rates; like the FireTV STB at $100 and the stick at $39. For all the accusations hurled at them, they rarely rely solely on pricing to win.
Back in the early days they were (falsely) accused of using ebooks as loss leaders for hardware sales and even at the height of the Nook challenge (circa 2011-12) nobody was able to prove they sold the readers below cost. Most cost estimation breakdowns showed a $5 profit on the ad-supported model. And those estimates probably underestimated their volume discounts on the eink screens. (At that time Amazon consumed over 50% of the eink screens coming out of the factory. Which is how they got dibs on Pearl screen production for a year.)
One thing people forget is Amazon is bringing a billion a year in ad revenue which is a business they built-up with the eink readers. Lots of ways to profit that don't show up on the short-term balance sheet.