Hacker News Reader

Comment by DaNmarner | Hacker News Reader

> “if Apple gives up its position” which it clearly hasn’t.

so, moot?

> Amazon is copying Apple’s playbook, page-by-page...

> What, after all, has Amazon (or Microsoft) actually invented here? Nothing. They’ve emulated Apple at a lower price point and to some extent disintermediated the mobile carriers.

Not according to Jeff Bezos, who spend a good portion of his presentation explaining how Amazon make money with their pricing strategy of the Kindles. The difference between iPad and Fire HD is not in price, but in their producers' business models.

The author clearly doesn't get it.

View on HN

The consumer doesn't care what the business model is. Microsoft's problem is that all its entry points into the market are being taken away. If it wants to go cheap it has to deal with the $299 Fire HD and the $199 (sort of) Nexus 7. Apple already straddles $399-$499. Those are brand name competitors with premium products and decent or better ecosystems.

It's not clear what Amazon's business model is. Bezos claims he wants to make money on content and not lose too much on devices, but he's losing money on Prime too. It seems to me Amazon's model is to get as much market power as possible -- ideally a monopoly -- and then charge rents, but I don't see how any such monopoly would be sustainable (at least without the DOJ foolishly helping). The one area where Amazon (temporarily) held a near monopoly was ebooks and this is precisely what it did (it still tries, only more subtly).

> Not according to Jeff Bezos, who spend a good portion of his presentation explaining how Amazon make money with their pricing strategy of the Kindles

He may have explained how they want to make money, but I don't recall Amazon or Jeff Bezos ever having stated the Kindle Fire has made them a profit. Indeed, Amazon have been very reluctant to even release hard sales figures for the Kindle Fire.

Amazon's fans seem to think that Amazon can sell a tablet at near cost and make money on either digital sales (movies/books/audio) or as a kiosk to sell physical wares.

What makes them think that they can outdo Apple in the first category? Apple which clearly has a huge installed base, yet runs the iTunes store at break even.

And using tablets as a kiosk might add some value to Amazon, but is it really necessary? Are iPad/Nexus 7/Surface users going to magically find a better/cheaper online merchant?

Reply on news.ycombinator.com