Amazon’s $79 Kindle costs $84 to make

November 14, 2011 · 1 comment

…or How Amazon could dominate the world.

Apparently, Amazon’s Kindle costs more to make ($84) than what it sells at ($79). This implies that Amazon takes a loss of 5 dollars with each Kindle sold. One would think such business is not sustainable, however it is far from being the case.

The device is subsidized with future revenues from built-in advertising and book purchases. Amazon breaks even when people buy books and click ads on the device.

What a smart move, Amazon – you will certainly get a good piece of the market. However, why stop at $79? How about pushing the price down to $0!?

Yes, a free Kindle to everyone!

If this ever happened, Amazon would probably ‘sell’ a couple of billion devices in matter of months. And surely, Amazon would take world leadership in mobile device market, but also potentially mobile advertising and distribution of information. Just an idea.

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{ 1 comment }

Tomasz Wegrzanowski November 15, 2011 at 1:47 am

It’s been known for a long time that Amazon is driving down price of basic Kindle down to $0 at some point. Rumor has it that it will be offered for $0 to Amazon Prime customers quite soon. Non-basic Kindle will still cost some money.

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