Amazon's Kindle Fire profitable: You bet

Summary:Even if Amazon started out underwater on the Kindle Fire's manufacturing costs, the company is already in the black on my account. Not bad for a month's work.

Amazon's Kindle Fire isn't a money pit after all. In fact, the Fire may just be a money machine.

Yup kids. The Kindle Fire is your personal shopping kiosk

Yup kids. The Kindle Fire is your personal shopping kiosk

An RBC Capital report, highlighted by Forbes' Eric Savitz, indicates that the Kindle Fire delivers a lifetime operating income of $136 per unit. That figure was based on a survey of 216 Kindle Fire owners. One highlight is that 80 percent of Fire owners purchased an e-book. Another guesstimate had Fire owners buying 5 e-books a quarter. They may also buy apps and movies too.

When the Kindle Fire first launched there was a lot of hubbub about Amazon's margins. I noted that the Fire was almost like carrying an Amazon kiosk around.

For me, the Fire debate is pretty much settled. The kiosk wins. The Fire may be a money pit, but it'll be my money pit not Amazon's.

For instance, RBC's report is very believable. I've seen it with my own behavior. Since I've owned the Fire, I've spent $52 on e-books and apps. If it weren't for Amazon's daily app deals that sum would be hire.

Bottom line: Amazon's Kindle Fire netted $52 in incremental revenue from me. Even if Amazon started out underwater on the Fire's manufacturing costs, the company is already in the black on my account. Not bad for a month's work.

Topics: Hardware, Amazon, Mobility

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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