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Amazon is lighting the match on its Fire

October 27th, 2011 by Joseph Ruthaford

The reports are in from the Q3 financials of Amazon and they reported lower than expected operation margins from Wall Street which saw their stock take a hit and there is even thoughts of a Q4 operating loss! But never fear Amazon says that this is due to expansion like building new distribution centers and of course the digital business with the new Kindle Fire on the way. Once again it was said that Amazon was happy to lose a bit on the Fire to make more money on the digital content. This is the standard for video game systems. They sell the product at a small loss or a breakeven and then they sell content for that device which makes up for the losses they see. Same will be put into play with the new Kindle Fire. The interesting thing is that Amazon is taking a different approach to this unlike Apple. Time Cook sells media so he can sell iPads and iPhones; Bezos sells Kindles so he can sell books, videos, and music and heck even advertising. With Apple already in the driver seat with their model, how will Amazon fair with theirs? Only time will tell.

Related posts:

1. Amazon could be losing on the Kindle Fire
2. Kindle Fire in the Fire
3. Amazon maybe Palming it
4. Amazon lending books
5. Kindle Fire to have some Nook Competition