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On this blog we will track down the latest Amazon Kindle news. We will keep you up to date with whats hot in the bestsellers section, including books, ebooks and blogs... and we will also bring you great Kindle3 tips and tricks along with reviews for the latest KindleDX accessories.

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September 2016
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Kindle Fire HD Sold At Cost – Jeff Bezos

People have generally assumed that Amazon was subsidizing the Kindle Fire to some degree.  Analysts have estimated that the cost of materials and manufacturing was roughly equal to the asking price and when the first Kindle Fire was launched it was suspected that Amazon could be losing as much as $15 per device to keep the costs down.

When the first Kindle eReader was released, Amazon’s position was that the hardware had to justify its existence by providing profits separate from the digital content sales it encouraged.  With the frequent price drops that have occurred in the past few years, that’s obviously harder to stick to.  The Kindle was first priced at $399 and sold out in a matter of hours.  Now you can get a basic Kindle for just $69, so it’s hard to imagine the money coming in at the same rate.

The new position makes more sense given Amazon’s digital content ecosystem.  Bezos has come out and said, for the first time, “We sell the hardware at our cost, so it is break-even on the hardware.”  It isn’t a surprise and it certainly isn’t going to upset the status quo, but the confirmation of even fairly obvious suppositions breaks the secretive pattern that generally surrounds Amazon’s hardware business.

This is a convenient way to highlight the differences in sales philosophy between major competitors at a time when Android tablets are drawing roughly equivalent in both price and performance while Apple is rumored to be releasing a smaller version of the iPad before the holidays.

Apple, for example, is not known for releasing any hardware they can’t make at least a 40% profit from.  This is the biggest point against the constant rumors of iPad Mini development.  The only reason it’s becoming likely that Apple will release a smaller iPad at this point is the possibility of being shut out of a growing market.  Even then we can expect them to be getting significant return on each sale.  They’re not a company that’s willing to settle for the 30% cut they get from every sale of associated content.

Google, on the other hand, sells their Nexus 7 at cost with the expectation of a different return.  Yes they have a return from their Google Play sales, but the real money is in information acquisition.  Android is available for free to anybody who wants to use it because unless significant effort is made to avoid it, Android ties people into the Google system.  That means more marketing data and more potential for advertising revenue.

Amazon’s course, hoping that cheap devices will result in such a significant increase in sales that it will be worth the initial investment so long as no money is actually being lost on the hardware itself, may be the least obviously profitable of these.  Their experience and expertise when it comes to suggested sales and media serving make it totally believable that the Kindle encourages people to read four times as much as they normally would, but it’s not something that many other companies could hope to pull off.

Kindle Coming to AT&T Stores & Free Kindle Rumors

Kindle Comes to AT&T Stores

Beginning on Sunday, March 6th, customers at AT&T owned stores nation-wide should be seeing something new on the shelves.  The Kindle 3G, yes only the $189 model at this point since it is a cellular store, will be on display and available for customers wanting to grab on the spot or compare side by side with something like the iPad.  Heck, it’ll probably even be on the same wall for some easy reference.

The advantage of having the Kindle available to customers through these stores is clear.  Not terribly impressive at this point, but clear.  This makes one more place for people wanting to test drive a Kindle to stop in at.  That’s all.  I suppose it might be convenient for some people, but other than that there are no real incentives for people shopping at AT&T.

Wow.  That was short.  Ok, guess we have room for more news!

Free Kindles in Our Future?

There’s been talk lately about the possibility of free Kindle devices coming to us as early as November of this year.  Now, take this with a grain of salt, but I wouldn’t entirely discount it.  The rumor stems from an examination of the price drops that the Kindle has experienced since it first came on the market.  Apparently they’ve been pretty steadily linear so far.  So much so that it looks as if we can predict precisely when the price will hit zero.  When this was mentioned to Jeff Bezos last year, he is reported to have said “Oh, you noticed that!” with a smile and left it at that.

Recent speculation has involved a couple different ways that such a free Kindle could manifest.  While some people think it could end up being incentive in some promotion (i.e. Buy 30 eBooks, get your Kindle Free!), I consider the most likely scenario to be the Amazon Prime option.  While there are already a number of benefits to being a Prime member including free 2-day shipping on everything and, more recently, free streaming movies, wouldn’t it be that much more tempting to holdout customers if they got a free Kindle in the deal?

This would go that one step further toward making the Kindle, and Amazon in general, the first stop for any consumer purchase.  I know, having had a Prime membership for a while now, that I’m willing to choose Amazon over other retailers for no other reason than the quick shipping on most things already.  If they beef up their movie selection, I can see it replacing my Netflix account too.

Now, I know that I’m not one to talk, having already expressed my own eReader preferences, but if they sent a Kindle to my house even back when I was fully in the Nook camp and I didn’t have to pay a thing for it, the convenience might well have been enough to win me over.  Maybe that’s what the plan is?  An insidious plot to gain our business by giving good value for the money would be novel, I suppose!