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(PhysOrg.com) Fail $79 Kindle costs $84 to make. I was told there would be no math   (physorg.com) divider line 79
More: Fail, Kindle, iSuppli, tablet computer, Kindle costs, maths, IHS iSuppli  
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2763 clicks; posted to Business » on 11 Nov 2011 at 6:00 PM   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»   |    Get this fabulous T-Shirt and impress the methane out of your friends! shirt it!



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2011-11-11 05:02:58 PM
Hardware frequently sells at a loss. More news at 11.
 
2011-11-11 05:04:04 PM
Think of how much more expensive it would be to make if they weren't using child labor to get the metals and such in places like Afghanistan and Africa!
 
2011-11-11 05:13:35 PM
How much do the books cost?
 
2011-11-11 05:16:40 PM
Plus they sell ads on the $79 version.
 
2011-11-11 05:21:58 PM
IgG4: Plus they sell ads on the $79 version.

THIS. The ads are making them way more money than the hardware.
 
2011-11-11 05:45:19 PM
I just got done reading a book about the Japanese music industry, and they mention how Sony purposely sold CD players for only half the cost of making them, in the beginning. The entire point was to get people to buy the players, so they could make money on the media.

I suspect this is a similar thought process, plus the ads as mentioned above.
 
2011-11-11 06:06:15 PM
$79 Kindle costs $84 to make

or maybe the analyst doesn't know what he's talking about.
 
2011-11-11 06:08:03 PM
RodneyToady: Hardware frequently sells at a loss. More news at 11.

I hear cell phones don't actually cost $199 either.

/pondering upgrading from my 2g kindle to a Touch.
 
2011-11-11 06:15:45 PM
https://secure.wikimedia.org/wikipedia/en/wiki/Loss_leader
 
2011-11-11 06:20:38 PM
RodneyToady: Hardware frequently sells at a loss. More news at 11.

End of thread. What dumb ass thought this was important?
 
2011-11-11 06:21:29 PM
[romero.jpg]
 
2011-11-11 06:22:52 PM
Amazon is in the razor blade business.
 
2011-11-11 06:26:31 PM
Amazon takes 30% of everything you buy from them.

If you have a spare 22 large or so kicking around, buy yourself 100 shares of Amazon and put them in your safety deposit box for a minimum of 5 years.

You won't be sorry.
 
2011-11-11 06:27:17 PM
This is not news. The Kindle is the printer, the books are the ink.
 
2011-11-11 06:31:57 PM
When the Mach3 first came out, Gillette sent me a free razor. Based on my detailed analysis and breakdown of the component parts plus my intimate knowledge of manufacturing processes and supply chains, I can state with confidence that this razor cost more than nothing to make.
 
2011-11-11 06:37:02 PM
enry: RodneyToady: Hardware frequently sells at a loss. More news at 11.

I hear cell phones don't actually cost $199 either.

/pondering upgrading from my 2g kindle to a Touch.


Have you seen the Fire?
 
2011-11-11 06:52:13 PM
Marcus Aurelius: enry: RodneyToady: Hardware frequently sells at a loss. More news at 11.

I hear cell phones don't actually cost $199 either.

/pondering upgrading from my 2g kindle to a Touch.

Have you seen the Fire?


Yes. It's not e-ink.
 
2011-11-11 06:54:42 PM
It's amazing, but not really surprising, that most of the e-books that I'd be interested in cost $9.99 each. This is usually more then if I went into a bookstore and bought a new physical copy. Toss in the fact that the Kindle memory is non-expandable and you don't get all the memory to use, even the soon to be launched Kindle Fire only has 8 GB memory with 6 GB useable. At least with a Nook you could pop in a 32GB memory card for more storage for about $50. And with an unofficial 'OS patch' the Nook Color can be convinced to play NetFlix (or so I've heard).

/don't own either but I have been looking recently
 
2011-11-11 06:58:37 PM
Economics/marketing fail on Subby. Specially since that's the ad subsidized one.
 
2011-11-11 07:03:04 PM
Subby, do you think your phone was actually free?
 
2011-11-11 07:03:48 PM
Wonder how much Gillette lost when they sent me that free Mach 3 in the mail.
 
2011-11-11 07:17:09 PM
Benevolent Misanthrope: THIS. The ads are making them way more money than the hardware.

More than -$5.00?

Say it isn't so!
 
2011-11-11 07:18:15 PM
Yeah, and what is their spread on the ebooks again?
 
2011-11-11 07:22:04 PM
enry: Marcus Aurelius: enry: RodneyToady: Hardware frequently sells at a loss. More news at 11.

I hear cell phones don't actually cost $199 either.

/pondering upgrading from my 2g kindle to a Touch.

Have you seen the Fire?

Yes. It's not e-ink.


Neither is the Apple touch? I'm confused.

/been a long day
 
2011-11-11 07:44:09 PM
Ron Mexico's Revenge: Benevolent Misanthrope: THIS. The ads are making them way more money than the hardware.

More than -$5.00?

Say it isn't so!


Sighhhh. Blame it on the fact that I haven't had a drink in months.
 
2011-11-11 07:46:46 PM
Loss leader; here's a free syringe, first fix is free; etc.
 
2011-11-11 07:50:19 PM
MrEricSir: Wonder how much Gillette lost when they sent me that free Mach 3 in the mail.

With the blades costing what they do, probably nothing!

/Them's some damned expansive blades.
//You can sharpen them and use one cartridge for about six months by doing this (new window).
///Video is scary, but I tried it and it really works. Strop the blades on blue jeans.
 
2011-11-11 07:50:36 PM
czetie: When the Mach3 first came out, Gillette sent me a free razor. Based on my detailed analysis and breakdown of the component parts plus my intimate knowledge of manufacturing processes and supply chains, I can state with confidence that this razor cost more than nothing to make.

They sent me one for my 18th birthday. I've been using them ever since. I wonder if they still do that?
 
2011-11-11 07:56:30 PM
Marcus Aurelius: enry: Marcus Aurelius: enry: RodneyToady: Hardware frequently sells at a loss. More news at 11.

I hear cell phones don't actually cost $199 either.

/pondering upgrading from my 2g kindle to a Touch.

Have you seen the Fire?

Yes. It's not e-ink.

Neither is the Apple touch? I'm confused.

/been a long day


Nah, Kindle Touch. Smaller than the current version Kindle, still e-ink, 3g and wifi connectivity.
 
2011-11-11 08:01:24 PM
They make up for it on volume.
 
2011-11-11 08:03:09 PM
enry: Marcus Aurelius: enry: Marcus Aurelius: enry: RodneyToady: Hardware frequently sells at a loss. More news at 11.

I hear cell phones don't actually cost $199 either.

/pondering upgrading from my 2g kindle to a Touch.

Have you seen the Fire?

Yes. It's not e-ink.

Neither is the Apple touch? I'm confused.

/been a long day

Nah, Kindle Touch. Smaller than the current version Kindle, still e-ink, 3g and wifi connectivity.


Wow. I have 3 Kindles in my orbit and a Fire on order. I missed the touch completely.

I might have to get one on general principles.
 
2011-11-11 08:08:47 PM
bdub77: They make up for it on volume.

30% of $40 billion is $12 billion net.

That covers a lot of Kindles, if you know what I mean.
 
2011-11-11 08:10:47 PM
bdub77: They make up for it on volume.

I forgot the link.
 
2011-11-11 08:11:41 PM
The Kindle Fire will be selling at a loss also if the calculations are correct.

I'd buy one but I already have a Kindle Wifi 3G and a Kobo and many of the best features of the Fire will be unavailable in Canada. The Fire is a color tablet rather than a e-reader, which is why it does not use e-ink or e-paper. It is meant for the user who wants color text (magazines) and the web more than books and is a bridge between larger tablets and e-readers. The power consumption is thus much higher. My Kindle has a beta browser which is very slow and power-consuming. Good enough for an emergency glance at the web to see if I already have a DVD or a book.

Kindle books are usually about $9.99, cheaper than the hard cover, more expensive than the paperback perhaps, but with innumerable exceptions.

You can get plenty of good books for less or slightly more and lots of freebies if you like classics. I recommend either buying the classic for 99 cents (the editing is worth it) or getting it from a site that has volunteer editors. Many of the "freebies" are just scans and whole pages can be garbled, especially if the book scanned is in a typeface the scanner has trouble handling. This is true of many old books, for example those which use two forms of "s" as in "f" and "s" or joined letters for combinations like "sh" and "ch".

One tip: you can make your own Best of the Web bookmark guides using HTML webpage links. If you can't be bothered, you can buy applications such as this for 99 cents or more. This can save you 99 cents if you have a HTML bookmark page (exportable from Internet Explorer, for example).
 
2011-11-11 08:12:11 PM
If Amazon was smart they would offer Kindle for free or for a ridiculously low cost. They will make up for it on the back end by selling e-books.

Or better yet, sell Kindle for $40 and it includes three free downloads.

Once they get as many of the devices as they can into the consumer's hand, they will sell tons of e-books.
 
2011-11-11 08:44:43 PM
DigitalCoffee: It's amazing, but not really surprising, that most of the e-books that I'd be interested in cost $9.99 each. This is usually more then if I went into a bookstore and bought a new physical copy. Toss in the fact that the Kindle memory is non-expandable and you don't get all the memory to use, even the soon to be launched Kindle Fire only has 8 GB memory with 6 GB useable. At least with a Nook you could pop in a 32GB memory card for more storage for about $50. And with an unofficial 'OS patch' the Nook Color can be convinced to play NetFlix (or so I've heard).

/don't own either but I have been looking recently


Kindle Fire is getting the official Netflix app, too: http://www.hackingnetflix.com/2011/11/amazon-kindle-fire-will-have-a- n etflix-app-.html (new window)
 
2011-11-11 08:45:38 PM
DigitalCoffee: most of the e-books that I'd be interested in cost $9.99 each. This is usually more then if I went into a bookstore and bought a new physical copy.

When's the last time you've been at the bookstore?
 
2011-11-11 08:46:07 PM
They're making a killing on each of the books they sell. Depending on what percentage goes to author/amazon/publisher they still make a killing. Also when people do these "how much does it cost" type of scenarios they're typically going out and sourcing the parts as a one off. If I bought one widget, one whirlygig, and one doodad it costs this much in materials, however manufacturing plants don't buy things in onesey twosey manners like this, they buy in bulk, and get bulk prices.
 
2011-11-11 09:08:18 PM
Marcus Aurelius: Amazon takes 30% of everything you buy from them.

No, they don't
 
2011-11-11 09:55:03 PM
"Business" link submitted by someone who could barely know less about business.
 
2011-11-11 10:07:15 PM
CyberDave: Kindle Fire is getting the official Netflix app, too: http://www.hackingnetflix.com/2011/11/amazon-kindle-fire-will-have-a- n etflix-app-.html (new window)

I have to admit I'm surprised by that, since Netflix is their direct competitor for video. Then again, if they offer better deals than Netflix i suppose it will work itself out.

Either way I'm happy. Six days left I think until my Fire shows up on my doorstep.
 
2011-11-11 10:10:56 PM
Kar98: DigitalCoffee: most of the e-books that I'd be interested in cost $9.99 each. This is usually more then if I went into a bookstore and bought a new physical copy.

When's the last time you've been at the bookstore?


About 2 weeks ago. Went to the local B&N and played around with their display Nook for a bit. Most of the SF/Fantasy/Horror books that I looked up that I was interested in (that were available as e-books) were $9.99 and the paperback copy a few aisles over were running $6.99 to $8.99. Over half of the titles that I'd be interested in aren't out for the Kindle OR the Nook. While there were a few interesting titles in the $3.99 to $6.99 range, they were the rare exception and not the rule.

I figure that if B&N puts the Nook Color on sale for Christmas (or just a Black Friday special) I will probably get one. Then I'll get a 32GB memory card from Newegg for about $50 and be set for a long, long time.

A couple miles up the road from B&N is my favorite used book store. Several thousand titles on the shelves (it's a small place) and an off site warehouse with several 10's of thousands of books. Nice prices too.
 
2011-11-11 10:22:28 PM
Shrugging Atlas: CyberDave: Kindle Fire is getting the official Netflix app, too: http://www.hackingnetflix.com/2011/11/amazon-kindle-fire-will-have-a- n etflix-app-.html (new window)

I have to admit I'm surprised by that, since Netflix is their direct competitor for video. Then again, if they offer better deals than Netflix i suppose it will work itself out.

Either way I'm happy. Six days left I think until my Fire shows up on my doorstep.


Netflix is a big customer of Amazon Web Services, so I guess whoever wins, Amazon wins.
 
2011-11-11 10:30:56 PM
I just got the joystick Kindle. I don't like the idea of a touch screen reader. I like touch screens but I look at my keyboard and think do I want to read through that kind of spooge?

Expandable memory would have been nice.

First download was project gutenberg's adventures of sherlock holmes. hee hee hee. free.
 
2011-11-11 10:37:41 PM
I don't know what deals Amazon has cut with big publishers, but for the rest of us they keep 30% of the selling price of an ebook.

That's $3 for every $10 ebook that costs them next to nothing to "warehouse" or deliver.

They don't need to run ads on those $79 kindles. They need to sign you up for an Audible like "book credit a month" scheme.

/I signed up for annual Audible Platinum
//I drive a lot.
 
2011-11-11 10:51:37 PM
DigitalCoffee: It's amazing, but not really surprising, that most of the e-books that I'd be interested in cost $9.99 each. This is usually more then if I went into a bookstore and bought a new physical copy. Toss in the fact that the Kindle memory is non-expandable and you don't get all the memory to use, even the soon to be launched Kindle Fire only has 8 GB memory with 6 GB useable. At least with a Nook you could pop in a 32GB memory card for more storage for about $50. And with an unofficial 'OS patch' the Nook Color can be convinced to play NetFlix (or so I've heard).

/don't own either but I have been looking recently


When you buy something on Amazon, it is available forever on their servers. You really wont need all the space unless you plan to use it outside of somewhere that doesn't have wifi. I use their cloud service already for my MP3's (which if you buy from them for any music, it doesn't add to the data cap). Yeah it doesnt have 3G but they probably didn't want to pay the carriers for the data for streaming movies or music. $199 for a tablet is a great price. The fact that it is on the Amazon Cloud was a deal maker for me.
 
2011-11-11 11:01:06 PM
jaflasvegas: When you buy something on Amazon, it is available forever on their servers. You really wont need all the space unless you plan to use it outside of somewhere that doesn't have wifi. I use their cloud service already for my MP3's (which if you buy from them for any music, it doesn't add to the data cap). Yeah it doesnt have 3G but they probably didn't want to pay the carriers for the data for streaming movies or music. $199 for a tablet is a great price. The fact that it is on the Amazon Cloud was a deal maker for me.

Plus there's this from Amazon:

8GB internal (approximately 6GB available for user content). That's enough for 80 apps, plus 10 movies or 800 songs or 6,000 books.

I personally wish the Fire had more onboard storage since I'll use it for movies on occasion, but I can live with relying on the cloud. But if we're just talking about books, which seems to be the main focus of the conversation, I would say having room for 6,000 would be ample. Hell, I can live with 5 books...I'm not going to need more than that at once, and it's not like you're forced to keep them on the Kindle anyway.

But I can see the appeal for some people for the higher memory at $50 more that the Nook offers. For me though...my wife and I have been Prime members for years, so this was a pretty easy decision.
 
2011-11-11 11:08:39 PM
"It was my understanding that there would be no math."

No one ever gets this right.
 
2011-11-11 11:15:19 PM
Cajnik: Marcus Aurelius: Amazon takes 30% of everything you buy from them.

No, they don't


Then please enlighten me, sahib.
 
2011-11-11 11:40:41 PM
czetie: When the Mach3 first came out, Gillette sent me a free razor. Based on my detailed analysis and breakdown of the component parts plus my intimate knowledge of manufacturing processes and supply chains, I can state with confidence that this razor cost more than nothing to make.

I got a Mach3 on my 18th birthday. "Sweet", I thought, "free product!" I've been using Gillette razors ever since, even with their $5/head prices. I guess sending me a free razor worked out well for them.

/ How come there aren't more "generic" / grocery-store-branded razors like the Mach3 or Fusion?
// I don't shave as much as I probably should since I don't want to spend one razor head per week just to have a close shave on a consistent basis
/// On topic: Love Amazon
 
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