While the $79 sticker price for the basic Kindle may seem attractive to customers, Amazon’s probably hoping shoppers will opt for any of the other models instead. A new report reveals that each basic Kindle costs Amazon $84 to produce, generating a loss for the retailer for every unit sold. Not to mention, shipping, software and licensing fees for Amazon, bringing that loss to a substantial figure.
Amazon won’t be sweating the loss too heavily, though, Firstly, the $79 model comes equipped with ad-supported content. More significantly, like the makers of video games consoles, Amazon has recognized that money doesn’t need to be made by selling hardware. Rather, it’s more important to wrap consumers into their respective universes, whether its Xbox Live and licensing for game titles, or in Amazon’s case, its bevy of subscription services such as Cloud Drive, Video on Demand, and Prime, all of which feed content to the Kindles.
[via Business Insider]