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[Time] Why Some 7-inch Tablets Will Eventually Be Given Away Free

post #1 of 6
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Quote:
About 18 months ago, I was one of the first to write about what I thought Amazon’s business model would be for its tablet that launched last fall. I had heard from my sources in Taiwan that Amazon was looking at selling the tablet at cost or even below cost and then make up the profit through products and services offered to customers.

Sure enough, when the first Kindle Fire was announced at $199, my sources in Taiwan said that the tablet’s actual bill of materials (BOM) cost was probably close to $212. That means that Amazon would have to rely on customers buying music, books, videos, and hard goods and then amortize a portion of the profit from those sales to make any money on the device itself.

Since then, Amazon CEO Jeff Bezos has said that Amazon doesn’t plan to make money on hardware. Instead, the company will make money from the goods and services consumers buy while using products like the Kindle Fire and the Kindle Fire HD tablets.

(MORE: Why PC Companies Fear Amazon)

What Bezos understands well is that his tablets — or any tablets, for that matter — can act as front ends for delivering content, services and, in Amazon’s case, physical products. While Amazon has made the new Kindle Fire HD tablets valuable in their own right, the real reason they exist is to spotlight all of the offerings Amazon has for its tablet users.

http://techland.time.com/2012/10/08/why-some-7-inch-tablets-will-eventually-be-free/


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post #2 of 6
Good business plan. Really smart.
post #3 of 6
Unless windows tablets become mainstream and we aren't stuck buying apps/content from a single source. Still, sounds like a good strategy for the near future.
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post #4 of 6
i want one...
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post #5 of 6
Quote:
Originally Posted by tipsytoto View Post

Unless windows tablets become mainstream and we aren't stuck buying apps/content from a single source. Still, sounds like a good strategy for the near future.

Well you'd still be buying through one source -- the windows marketplace -- right?
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post #6 of 6
Give customers an easy to use and easy to access portal to your products, and they are more likely to purchase.

My wife gets Amazon Prime for free, she is a University student, and their shipping is freaking awesome! I find it far easier to just hop on Amazon, find what I want, click it and have it the next day or two, than go to a big box store. Better pricing, fast shipping, I can wait a day versus driving to town and dealing with the crap you get in stores.

The last time I was in Best Buy I ended up yelling at the employee who kept pushing me to buy a warranty, my wife got embarrassed, but she also understands I don't deal with crap.
Edited by PostalTwinkie - 10/8/12 at 4:56pm
    
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Overclock.net › Forums › Industry News › Technology and Science News › [Time] Why Some 7-inch Tablets Will Eventually Be Given Away Free