Quote:
Originally Posted by Robertb
The ones jumping on the bandwagon are Barnes & Noble types. They are NOT looking at making anything on the eBook Readers. They look at making money on the eBooks themselves. That is where the profit is.
I try very hard to be honest all the time on this forum. I do not expect anyone to instantly believe... but this is a pretty learned crowd. THINK!! Amazon makes it so you can buy ONLY from Amazon. WHY? The profit is in the eBooks. There is nobody new jumping into just making eBook Readers. Why do you think Plastic Logic teamed with B&N? Because they might get some of the money from sale of the huge library of eBooks.
The "independents" like Astak are making the thinnest of margins.
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It is well known by everyone in the industry that Amazon et al. LOSE MONEY on eBook sales. Barnes & Noble types are looking to make profits in the future and battling for market share, but there's no profit in eBooks as of right now. They pay publishers about $12 for NYT bestsellers, half the price of the hardcover, and they take a loss with each sale at the $9.99 promotional price.
The fact is that profit margins on eBook readers are LARGE relative to, say, computers. There's overhead, R&D, marketing, and middleman markups; but the actual manufacturing costs are low. An 800x600 E ink display module runs ~$40-$60, and the only other expensive (>$10) parts are wireless modules and touchscreens. Isuppli has done a teardown of the Kindle 2 and it costs $185 to build, vs. $299/$359 retail. That's a VERY healthy margin. (Of course, the Kindle's selling price includes free lifetime wireless data service.)
With no wireless module and a smaller screen with less grayscale, the Pocket Pro should cost well under $150 to manufacture. Maybe $100-$125, I'd hazard to guess. Don't get me wrong: I still want one. It looks like a good unit and you don't buy an ultrahigh margin case separately. I just like to think I'm learned enough to know I'd be paying an early adopter price.