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Topic: Hardware

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.

Larry Dignan

By for Between the Lines |

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

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13 comments
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  • English

    "If it weren???t for Amazon???s daily app deals that sum would be hire.", surely you mean higher?
    ben.rattigan
    Reply Vote

    • RE: Amazon's Kindle Fire profitable: You bet

      @ben.rattigan

      I think he means "haaay yaaa!" like in the Kung Fu movies.
      dsf3g
      Reply Vote

    • RE: Amazon's Kindle Fire profitable: You bet

      @ben.rattigan

      Might have been a Freudian slip. He was thinking: "Hire (me) so I can buy more Amazon goodies" ? Yeah, we've all been there. hehehe
      admiraljkb
      Reply Vote

  • RE: Amazon's Kindle Fire profitable: You bet

    I've got over 100 Andoird apps tahnks to Amazon's Free Ap of the Day. Of course, only a small subset are actually installed on my device. But still.
    dsf3g
    Reply Vote

  • RE: Amazon's Kindle Fire profitable: You bet

    I've got over 100 Andoird apps tahnks to Amazon's Free Ap of the Day. Of course, only a small subset are actually installed on my device. But still.
    dsf3g
    Reply Vote

    • RE: Amazon's Kindle Fire profitable: You bet

      @dsf3g: maybe you should get a spell checker app?
      common sense
      Reply Vote

  • RE: Amazon's Kindle Fire profitable: You bet

    The fire is awesome, this is why Apple is pressing the books hard because $199 and a much less fragile frame is tough to beat when it comes to school books.
    slickjim
    Reply Vote

    • RE: Amazon's Kindle Fire profitable: You bet

      @Peter Perry
      Yeah, I'd never send the kids to school with an iPad. Too fragile, too big and too expensive. I'm impressed by how sturdy my Fire is. The younger kids I'd just give them the lower end $79 Kindle though. Since Amazon already has the textbook market sewn up (with BN trying as well), and Wikipedia then has the editable "Textbook market" sewn up, I'm really pretty confused by Apple's attempt there. Seems like a knee jerk reaction to Amazon.
      admiraljkb
      Reply Vote

  • Typo: 'hire' should be 'higher'

    "... that sum would be hire."
    Patanjali
    Reply Vote

  • Content is the real ecosystem

    Apps are a one-off, but content is ongoing.

    Having 100,00s of apps is nothing if a person just buys a few and the spending stops there. Those that buy the Fire want the type of content that is required ongoing.
    Patanjali
    Reply Vote

  • RE: Amazon's Kindle Fire profitable: You bet

    No surprise for those who analyze matters and not consumed by the IPad versus others spin. The next story to debunk is the story that Amazon is decreasing orders from suppliers for the Fire. Amazon will be introducing a larger size Fire and knows that many will opt for the larger size. The Ginger versus Maryann crowd do not want to look at the big picture.
    oldgeek143
    Reply Vote

  • RE: Amazon's Kindle Fire profitable: You bet

    Years of buying from Amazon. Never got Prime. Never needed 2 day delivery.<br>Prime came with the Fire. 1 month free. In Dec. But the freeTV and movies sold me. Subscribed in Jan.<br>Bezos may be a genius. Right price point and a very big carrot.
    LCaution
    Reply Vote

  • RE: Amazon's Kindle Fire profitable: You bet

    I've not spent a penny on books since I got my Fire - but I have spent at least $30.00 on movies. Whereas the reflective screen Kindles increased my reading, the Fire is increasing my video media consumption. I see this as an on-going trend whereas it's easier for me to spend $4.00 a pop for a movie (and not realize how much it's adding up) than to spend $10.00 on a book that'll take me a month to read (since I'm so distracted by the video!).
    RKing7291@...
    Reply Vote
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