Amazon: breaking even on popular Kindle sales(Read article summary)
In an interview with the BBC, Amazon CEO Jeff Bezos confirmed what many surmised: Amazon is selling the Kindle Paperwhite and Kindle Fire HD at cost.
Several Kindle devices are sold at cost, bringing Amazon no profit on the hardware.
“We sell the hardware at our cost, so it is break-even on the hardware,” Bezos told the BBC.
Of course, Bezos isn’t necessarily doing the consumer any favors. That aggressive pricing is part of his goal to get Kindle tablets in as many hands as possible in order to broaden the base of consumers for Amazon’s online content – from books to games to video – which is the real cash cow of Amazon.
That strategy differs starkly from Apple’s. Apple makes a profit on every iPhone, iPad, and other iDevice it sells, with much content thereafter available for free, or “slightly above” break-even on iTunes content.