Amazon confirms it sells hardware at cost, not making money on it
Amazon lastly unveiled its second wave of Kindle tablets under the Fire HD brand. All of them come with high-resolution screens with prices starting from $199 for the 7-inch model, and $299 for the 8.9-inch device.
"Basically, we sell the hardware at our cost, so it is break even on the hardware," Bezos said in an interview for the BBC. "We're not trying to make money on the hardware."
So where does Amazon makes its profits from? Obviously, it works similarly to the way Google does with Android by releasing the world’s most popular operating system for free. In this case, Amazon doesn’t do it for the ads, but for user engagement into its ecosystem. That model is hardly making it much money, but revenues are growing and some people like Google chairman Eric Schmidt actually think it’s one of the big four along with Google, Apple and Facebook.
1. kirholstov (Posts: 123; Member since: 28 Jun 2012)
They are making money on apps, films, music and books
2. wendygarett (unregistered)
No wonder kindle fire satisfied the most on android tablets...
3. ibap (Posts: 650; Member since: 09 Sep 2009)
This is not a new model. Think old-style razors with replaceable blades and ink jet printers with cheap printers and expensive ink.
4. cepcamba (Posts: 717; Member since: 27 Feb 2012)
They won't make money from me when I get one of those 1080p 8.9" tab 'cause I'd be rooting and putting a custom ROM on it and I wouldn't even see a glimpse of the Amazon Ecosystem *that's if devs work on it :p
6. JonBjSig (Posts: 168; Member since: 17 Nov 2011)
And yet Google is still able to sell a better tablet for the same money.
8. downphoenix (Posts: 1996; Member since: 19 Jun 2010)
Um no, because
1) This has double the memory.
2) The processor performs higher on benchmarks.
9. JonBjSig (Posts: 168; Member since: 17 Nov 2011)
The benchmarks I found here:http://www.techhive.com/articl
10. JeffdaBeat (unregistered)
Make no mistake, they will make money off of you in some fashion. They aren't doing this out of the kindness of their hearts.