Amazon CEO admits Kindles are sold at cost

By , Oct 12, 2012

For some time, Amazon CEO Jeff Bezos has been cagey when it comes to discussing hard numbers surrounding the Internet retailer’s Kindle. But apparently, Bezos is a bit more open when not talking to U.S. reporters. Speaking to the BBC Thursday, Bezos said his company sell’s “the hardware at cost, so it is break-even on the hardware.”

The answer shouldn’t be too much a of a surprise. As All Things Digital notes, selling items cheaply in hopes of consumers snapping up humungous numbers of your widgets is a rather common retail practice. Apple has successfully bucked this trend, hauling in huge profit margins for its devices…

Amazon’s Kindle business is a near mirror-image of Apple’s, in fact. Apple pretty much gives away apps in order to boost sales of its devices. Indeed, the Cupertino, Calif. company has said iTunes and the App Store barely break even. For the iPhone and iPad maker, content — be it apps, music, books or videos — exists only to sell more hardware.

Bezos, on the other hand, is all about the content. Indeed, the Kindle could be viewed as just a content delivery device. For Amazon, it’s not important how many Kindles are sold, but the fact the company is pushing out e-books. It’s like asking a Detroit auto maker how many tires it sold during the last quarter — the number is inconsequential.

That differing viewpoint is likely why analysts always ask for hard numbers of Kindle sales and why Bezos always replies with some generic “millions and millions” figure. We can’t expect a content company like Amazon to deliver the same information that a device firm has at the tip of its tongue.

When Amazon begins shipping its new Kindle Fire HD next month, you’ll be able to gauge how successful the device is by how many e-books, movies and tunes are sold.

What do you think? Could Apple succeed be selling the iPad or iPhone at cost?

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  • http://twitter.com/WrightsCS Aaron Wright

    Hey Amazon, you’re doing it wrong.

  • Johnathan Jennings

    Apple has great prices.. Except for the new iPod touch. It’s insane.

    • http://www.facebook.com/dietermarkus Markus Hudobnik

      But think… You are getting an iPhone without the cell phone with no contract for that much.

    • http://www.facebook.com/abraham.utrera Abraham Utrera

      I was shocked when I saw the price of it

  • seyss

    anything to make you look like you’re in the game

  • http://twitter.com/MCaudebec Maxim∑

    Kindle sucks… iPad and Nexus 7 are the best tablets out there, and soon to be ipad mini

  • http://www.facebook.com/davidhanlee David Han Lee

    Good Guy Amazon

  • http://www.facebook.com/people/Ba-Tongxue/100003554938315 Ba Tongxue

    Poor Jeff…
    You know which Jeff I’m talking about.:)

    • http://www.facebook.com/xxLIUZHENYUxx Liu Zhenyu

      He is like freaking rich, every apple product is in his house, how does he afford them as a blogger? o.O

  • Johnny

    It’s called a loss leader.