





Source: BBC

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By TakinYourPoints on 10/13/2012 11:28:40 PM , Rating: 2
Apple makes money on hardware, not media. Profit on media isn't there for anyone, Apple included. Everyone pays similar wholesale rates for media and has similar profit splitting with publishers for software. iTunes and the App Store generate less money for Apple than anything else in their portfolio.

Amazon's goal isn't to make money on the hardware, even as the hardware cycle continues since they'll just update to more expensive hardware and continue to drop the price, thus resetting the cycle.

Their goal is the same as other big box retailers, which is to get more customers at razor thin profit margins. It is nothing like the profit margins sought by techs Microsoft, Apple, IBM, Google, etc.

They'll sell media for very little, but more importantly most Kindles are now portable digital billboards for other products that Amazon sells. Why should Amazon limit their advertising to the web and email, now they can do it on your tablet or e-reader as well. If Amazon ever makes a phone, look forward to inexpensive devices that serve ads on the lock screen.

