Amazon has released a bunch of new e-readers and tablets to the market in the past few weeks. More are on the way as Amazon brings its 8.9 inch Kindle Fire HD to the market soon. But how much money is Amazon making? According to Jeff Bezos, Amazon is only breaking even on Kindle devices. That seems to fit well with Amazon’s strategy to make money when people use its devices.
We sell the hardware at our cost, so it is break-even on the hardware … We want to make money when people use our devices, not when people buy our devices…. What we find is that when people buy a Kindle they read four times as much as they did before they bought the Kindle.
explained Amazon’s CEO to BBC. Amazon has been focusing hard on growing the Prime program. The company has been using it to keep its customers loyal. Here is the problem though. While Amazon has tried to keep customers from going to other platforms, the new Kindles do leave a whole lot to be desired.
The Kindle Fire HD is not even close to being the best 7 inch tablet on the market. The Kindle Paperwhite has a lot going for it. But B&N and other Amazon competitors have repeatedly come up with innovative solutions for e-readers before Amazon in the past couple of years. The whole ads-program for Kindles has annoyed some Kindle users too. Will this strategy pay for Amazon? It seems like so at this point.