Originally Posted by thewitt

Originally Posted by jsh1120

To the extent that they can drive traffic to the Amazon website they can profit from purchases in those areas, as well.

This will not keep a product in production that loses money on every sale. It doesn't work that way in the real world.

If they cannot DIRECTLY trace revenue and profit to a tablet, they will drop the product.

"Gray" sales will never keep alive.

-t

And that's why the Kindle didn't survive. Now I understand.

Originally Posted by jsh1120

And that's why the Kindle didn't survive. Now I understand.

No need to be snide.

Kindle book sales are DIRECT sales as a result of the hardware, not gray-area sales. The hardware is in fact useless without book sales.

You indicated that the tablet would be a success by simply driving other Amazon product sales unrelated to the tablet. These sales would NOT be traceable back to the tablet and could not be considered success of the tablet.

Without hard sales data traceable back to the tablet no company would simply lose money every quarter on the hardware...and accept that loss while assuming sales of other items in their store are up because of that hardware.

Retail just doesn't work that way.

Amazon may be making a strategic decision to lose money on every tablet sold, but they had better have a profit strategy in their plan or we will soon be saying, "Remember Amazon.com" ...

-t

I'm surprised no one has brought up the education aspect. You read stories of how schools are considering tablets,a school district in Texas has already shelved text books for Kindles and districts from all over the US are watching the experiment, asking questions and working on budgets to go that route in the future . If given the choice of an Ipad for text books vs a less expensive alternative that will do the same thing?
I've yet to see where the Amazon tablet at a lesser cost will ACTUALLY LOSE money with each hardware sale . Sure they won't make the exorbitant profit each Ipad does.

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The first page quote has the analyst stating that Amazon can sell at a loss to be competitive.

-t

Can is the key word. Will is not mentioned. The Kindle didn't sell at a loss initially. When the device didn't sell as expected AND got competition the price drop to a loss occurred.

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"loss leader" is not an uncommon thing in business.
The folks at Amazon didn't just wake up last week and say "hmm I want to get into the tablet market"

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Originally Posted by thewitt

Originally Posted by jsh1120

And that's why the Kindle didn't survive. Now I understand.

No need to be snide.

Kindle book sales are DIRECT sales as a result of the hardware, not gray-area sales. The hardware is in fact useless without book sales.

You indicated that the tablet would be a success by simply driving other Amazon product sales unrelated to the tablet. These sales would NOT be traceable back to the tablet and could not be considered success of the tablet.

Without hard sales data traceable back to the tablet no company would simply lose money every quarter on the hardware...and accept that loss while assuming sales of other items in their store are up because of that hardware.

Retail just doesn't work that way.

Amazon may be making a strategic decision to lose money on every tablet sold, but they had better have a profit strategy in their plan or we will soon be saying, "Remember Amazon.com" ...

-t

No, in fact I didn't say "that the tablet would be a success by simply driving other Amazon product sales unrelated to the tablet." I just pointed out in response to another post that this is an additional benefit. Amazon, like Apple, derives significant long term benefits by attracting customers to their brand.

My main point was in an earlier post. Amazon can make a success of a low priced tablet by keeping its price significantly below that of an iPad and leveraging their huge customer base of Kindle owners and potential purchasers. Much as Apple leveraged the huge base of iPod Touch owners and potential purchasers to a higher priced device.

Okay, boys ~ This is a great discussion and I, for one, am learning a lot from you both.

Let's not get personal and just discuss, respectfully, please.

I expect Amazon tablets would sell for the same reasons Kindles sell -- their firmware would make buying content from Amazon super easy, with great customer support and the ability to take your content to other devices if you choose. That's why I buy Kindle books nearly exclusively, even though there are plenty of other options. If I choose to switch hardware, I won't have to abandon my content, as I would with iBooks, for instance.

Amazon also has lots to leverage with a host of services and products. It has a credit card, bonus points, Amazon Prime and other buying programs that it could use to help make its hardware and content even more attractive, for instance. The key difference between a company like Apple and Amazon IMO, is its leadership. The companies both have visionary leaders in Jobs and Bezos, but Bezos's leadership seems much more open and embracing of what customers want. Bezos showed with Kindle, for instance, that Amazon will admit mistakes and change services to better serve customers. I have great respect for what Jobs has done, and Apple certainly has lots of satisfied customers, but Apple customers have to do things as Apple decrees.

What I'd expect from an Amazon tablet is essentially a more usable Android tablet than any other competitor could produce, with the whole package -- hardware, firmware, content and support. I don't think Amazon would bothering producing a tablet unless it could deliver a great customer experience.

The amazon tablet could be a failure of epic proportions. In less than a year, B&N released 2 versions of the nook (color and touch eink) while Amazon did or said nothing. Also take a look at the HP touchpad- also an epic failure. Unless Amazon released 2 versions of the Kindle- I do not see amazon as a threat to anyone. By releasing a color touch will alienate their millions of eink fans. To release 2 kindles at the same time would be a disaster in the making...Amazon is screwed either way in my opinion.