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?