What Amazon needs to make the Kindle Fire experiment a success
TweetFollow Us on Twitter

What Amazon needs to make the Kindle Fire experiment a success

The Kindle Fire, which Amazon is widely reported to be sold at cost or below the margin, has been one of the most intensely followed technology product stories over the past year.

A new study from ABI Research (www.abiresearch.com) concludes that the cross-subsidized device model that Amazon uses is a viable strategy. According to senior analyst Aapo Markkanen’s calculations, the firm would need, on average, an incremental profit of about $3 in each month of a tablet’s lifespan to achieve an overall profit margin of 20%.

"Considering the probable margins of app and content sales, our research shows that Kindle Fire is a credible proposition," Markkanen comments. "We expect that there will be a certain level of ‘innovation plateauing’ in mobile hardware taking place over the next five years, and that would certainly work in Amazon’s favor. Its future devices are likely to require less cross-subsidy than the ones we’ve seen so far."

Amazon’s mobile strategy is distinctly two-pronged, since besides its own devices the company also offers a popular portfolio of apps running on all major OSes. ABI Research estimates that altogether the Kindle, Amazon Mobile, Cloud Drive, and Price Check apps have seen over 180 million downloads. The already established presence on mobile devices begs the question whether such a platform-agnostic approach would actually serve Amazon’s interests better than investment in a competing ecosystem.
Markkanen doesn’t think so, saying, “Kindle Fire may look like an aggressive push into a whole new market, but it’s more of a defensive play, born out of necessity. If Amazon bet its post-PC future only on the web and apps, it would be dangerously exposed to the likes of Apple and Google. Whoever controls the platform has a more frictionless relationship with the user, and that relationship can become real poison for any third party that relies on the same platform for its own business.”

 
Community Search:
MacNews Search:
See All
view counter

view counter
view counter
view counter
view counter
view counter
view counter

Soft Drummer (Music)
Soft Drummer 1.0 Device: iOS Universal Category: Music Price: $14.99, Version: 1.0 (iTunes) Description: Soft Drummer is the closest thing to a pro session subtle drummer in your pocket. Easy to use and fast, it's much more than a drum machine because it can improvise musically with the most pure acoustic drumming sound, played... | Read more »
Is GO Gear the Pokemon GO map app you...
Now that we've settled into something of a Pokemon GO status quo, the number one desire of most players can best be summed out by modifying a quote from Rod Tidwell of Jerry Maguire: "Show me the Pokemon!" [Read more] | Read more »
Rodeo Stampede update: Mountains, new an...
The Savannah and Jungle were just the beginning in Rodeo Stampede. Get ready to head for the Mountains. I think I heard that in a beer ad once. [Read more] | Read more »
COSMOS RINGS (Games)
COSMOS RINGS 1.0.0 Device: iOS iPhone Category: Games Price: $5.99, Version: 1.0.0 (iTunes) Description: This game cannot be played without the Apple Watch.Released anniversary sale until August 31,2016 PST!A tragic tale of time's cruelty unfolds in Square Enix's first Apple Watch-exclusive RPG!■A dark and timeless world | Read more »
How to get started selling on Mercari
As far as ecommerce has come over the last decade or so, there's still a tremendous opportunity to make it easier for people to buy and sell goods. That's especially true when it comes to shopping apps, which should only continue to increase in popularity for at least the remainder of this decade. [Read more] | Read more »
Human Anatomy Atlas 2017 Edition - Compl...
Human Anatomy Atlas 2017 Edition - Complete 3D Human Body 1.0.24 Device: iOS iPhone Category: Medical Price: $24.99, Version: 1.0.24 (iTunes) Description: | Read more »
Heroes of Normandie (Games)
Heroes of Normandie 1.5 Device: iOS Universal Category: Games Price: $14.99, Version: 1.5 (iTunes) Description: The game does not support iPhone 4s and below | Read more »
Why you should never power up Pokemon in...
There's no question that candy is dandy in Pokemon GO. You need big quantities of it to evolve your Pokemon, and when combined with stardust, it can be used to power up your favorite pocket monsters as well, making them more formidable for the gym battles that await you. [Read more] | Read more »
Webzen launches 3D MMORPG MU Origin on i...
Mu Origin is featured time and time again at the very top of App Stores in China, and within the top five worldwide top-grossing charts on Google Play.Its popularity in Korea and China, featuring more than 120 registered players in China and 6 million downloads in Korea, has quickly transferred over to Europe and America. [Read more] | Read more »
Severed (Games)
Severed 1.0 Device: iOS Universal Category: Games Price: $5.99, Version: 1.0 (iTunes) Description: LAUNCH DISCOUNT ON NOW!! ENDS AUGUST 4!====Take control of a one-armed warrior named Sasha, wielding a living sword on her journey through a nightmare world in search of her family. | Read more »
All contents are Copyright 1984-2010 by Xplain Corporation. All rights reserved. Theme designed by Icreon.