Amazon tablet costs $209.63 to make, IHS estimates
finance.yahoo.com
finance.yahoo.com
Samsung and HP aren't retailers. People don't (almost without exception) buy direct from them. You don't visit Samsung.com and order a Tab. You buy them at other retailers like BestBuy and (lol) Amazon. So Samsung have to add another hefty cost on top of their manufacturing cost - the retailer's margin. Bestbuy don't want to be stocking shelves full of Galaxy Tabs, littered with merchandising, for the lure of 3%. They probably didn't much fancy the HP Touchpad either, and look how that turned out. (They'll stock Apple goodies for wafer-thin margins though, because it brings in affluent customers and looks good in the store.)
Amazon are going to be playing on their own at the $200 price-point - not only are they the only player who can subsidise devices with future content sales, but they can distribute them for virtually nothing. $1 to UPS and your Kindle is on its way.
But there's a big multicoloured elephant in the room waving it's trunk around. Yes, it's Google. And they've got neither manufacturing, nor retailing, nor future content sales. But they're big and rich and a bit mental.
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Also posted at http://www.alexmuir.com/2011/09/why-apple-and-amazon-are-con...
As for google, they have motorolla. And their 'content sales' is web use ( > advertising). But do they need a cheap tablet? No, Amazon is making it for them already, for a $10 loss.
If you buy an eBook reader you need to obtain a steady stream on content for it as long as you want to keep using it, while other retailers have a far higher chance of not getting that $10 back because they don't have a well establish content store like Amazon or iTunes.
Amazon, just like Apple, doesn't really buy components by the million at street unit price, is this a surprise? Why do people still comment on these non-events, insignificant press releases? This is only iSuppli marketing, and not much else.
Do you have a source for this or are you just making an assumption?
Similarly, Apple wants to be my library too - they keep some of my music, most of my apps, and now they also want to keep my videos, my app data (including but not limited to books) and the rest of my music via iCloud.
IOW, they key battle here is for being X in "I keep all my books/music/movies/games over at X" for the average Joe.
If Amazon is still selling this model 1-2 years from now, they'll be in a decent position. If people obsess over specs rather than wanting to buy into an "Amazon experience" or similar, less-spec-driven purchase process, then Amazon might not be in as good a place given the low to negative margins at release.
In total the HW platform is pretty solid, it's not a relabeled cheap Chinese tablet...
Amazon has already set a precedent of operating like this, so I am not surprised. I am a techie with a head for specs. I've owned my Kindle 2 ever since the day it was released, and I haven't the foggiest idea what CPU it has, how much RAM it's got, or even how much flash it has or what version of the Linux kernel it uses. It's just a Kindle 2.
They don't hide the specs, but they (rather honestly) only talk about the specs that actually matter, and leave the other stuff in the wings. I figure it's part of their strategy of marketing to ordinary folk- not too different from Nintendo's marketing of the Wii, as compared to the Xbox 360 and Playstation 3.
To give you an idea of specs that "actually matter"- while I know nothing about the internal specs of a Kindle, I know (thanks to Amazon marketing) that the Kindle 3 has a 50% better contrast ratio than the Kindle 2, page turns were some 20% faster, and battery life was improved. Upon seeing one, I saw it was noticably smaller too. I think you'll agree that in a Kindle, these specs are far more relevant and honest than clock speed or resolution.
I'm not convinced that question has much relevance regarding the Fire because it has little relevance in regards to Amazon. If the Fire2 comes out next February, Amazon will still see it as just another device upon which they can sell content and their customers will see it as little more than the latest "super Kindle."
Unlike HP, Amazon can make money with content and has the experience to do so (One might even argue that they are in a far better position to make money with content than even Apple given Amazon's relationships with content providers and the extent of Amazon's cloud infrastructure). Of course, one might argue otherwise as well.
However, Amazon has a history of investing for the long haul and a more powerful consumer oriented tablet is certainly consistent with that history.
Right from Amazon's page on the Kindle Fire:
7" multi-touch display with IPS (in-plane switching) technology and anti-reflective treatment, 1024 x 600 pixel resolution at 169 ppi, 16 million colors.
Not hard to find.
"When further costs outside of materials and manufacturing are added in -- and the $199 price of the tablet is factored along with the expected sales of digital content per device -- Amazon is likely to generate a marginal profit of $10 on each Kindle Fire sold," the research firm added.
When ours comes in, I also plan to buy apps, etc. Easily an additional $10 will be spent within days of acquisition. My guess is that they will have at least another $30 in profit the first year from books, etc. and may sign up for Amazon Prime to get unlimited streaming, which is something I hadn't considered seriously until I saw it on the Fire page.
No wonder Amazon stock went up about 20% over the past several months. Some people knew this was going to be a big win.
I use a used bubble wrap mailing envelope. It fits the Kindle perfectly, protects the Kindle very well, costs $0.00, and it doesn't scream "steal me".
Why were traditional publishers blind to the fact that technology would replace them if they did not act? Or, if they were not blind of this fact, what prevented them from producing or investing in the new technologies themselves? What is it that makes old companies so slow to react to shifts in technology?
There is some kind of inherent advantage that tech companies seem to possess: regardless of their original market, they tend to be capable of adapting to significant market changes, sometimes with the effect of consuming old markets.