Quote:
Originally Posted by Robertb
Amazon's cost to make the Kindle 2 is still at that point where the right price is likely $279. There were no savings in manufacturing cost and they are advertising like mad... but they are willing to lose $130 per device just to gain Market Share. It is not fair... but it is reality.
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According to market research firm iSuppli Corporation's estimation(see
here), Kindle 2's cost is about $185 ($60 for the E-Ink display screen). So Amazon is selling Kindle 2 without profit at this point, and I don't think their ad cost is high (it is already very popular around the world and got the most coverage at most news media). Amazon also has more market power (than its competitors) to negotiate a lower cost with its OEM/ODM upstream partners and also with their wireless(3G) downstream providers. And it sells Kindle internationally with just a few clicks. (Early this year, my friend bought her Kindle 2 in less than a minute and received her Kindle in a few days. She lives in eastern/rural part of Taiwan! And she enjoys free 3G service and less than 60 seconds of downloading a book from Amazon!)
I will not consider Kindle myself because its limited format-support and the restrictive DRM function. I'm looking forward to see 6" Pocket Pro Plus with dictionary support to come out because I like the format support of PP and other functions of PP. Hope you will stay in business and give Amazon or B&N a good competition!