Kindle Fire really do lose money
Just from the hardware perspective, this tablet nothing amazing place: 7 inches wide , 8GB storage , 8 hours battery life, no camera , microphone, only supports Wi-Fi, these hardware worth $ 179 RK3188. Amazon's logistics costs equivalent to 5.1% of sales , with an average to a Kindle Fire, logistics costs $ 10. These two have accounted for 95% of the selling price .
Amazon for their estimated $ 290 million in taxes , but not the actual cash outlay . The main reason is its operating loss in previous years there will be tax deductible and delayed payment discount - especially this year after a loss on sale Kindle Fire obvious . All told , the Amazon in 2011 the entire fiscal year to 0.6% of its sales revenue , average per Kindle Fire only need to pay $ 1.2 in taxes. Plus marketing and R & D expenses , if you just buy a Kindle Fire hardware , Amazon to pay the cost of $ 221 , which means they have to subsidize at least $ 22 for you - just from the numbers, this is a loss pen trading .
Of course , Amazon 's ambition is to wish you more to pay for content . Canadian investment firm RBC Capital estimates , according to Amazon consumer data , an ordinary Kindle Fire users will buy $ 60 within a year of e-books, according to the book class split agreement , which can be divided into 30% of the Amazon , which is! $ 18 . Meanwhile , RBC Capital expects consumers to a year in the Kindle Fire App Store to buy 12 applications , plus including pay television works and ancillary merchandise Kindle Fire charges could bring $ 102.4 revenue for the Amazon , where profits accounted for $ 9.4 . In so doing , the price of a Kindle Fire is $ 199 though , but every consumer in the Kindle Fire on the actual consumption reached $ 301.4 . Types of services a year to bring $ 27.4 for the Amazon profits minus losses on sales before the $ 22 , the actual profit of $ 5.4 . With the Kindle Fire matures, believe that this figure will increase significantly in the future .