Amazon Selling Kindle Fire HD, Paperwhite at Cost
Jeff Bezos relies on users purchasing books and other media on the devices itself.
Amazon head Jeff Bezos has said the world's largest online retailer doesn't turn in a profit with its Kindle Fire HD tablet, as well as the soon-to-be-released Paperwhite e-reader device. Bezos stressed that Amazon sell the hardware at cost.
He later added that both devices' success would be defined by how many books and media files were bought by users. "We want to make money when people use our devices, not when people buy our devices," he said.
Bezos said that part of the reason the aforementioned strategy works was due to the fact that users' desire for media grows when they've owned one of Amazon's devices.
"What we find is that when people buy a Kindle they read four times as much as they did before they bought the Kindle. But they don't stop buying paper books. Kindle owners read four times as much, but they continue to buy both types of books," he added.
Amazon's Kindle Paperwhite and the 7-inch Kindle Fire HD tablet will begin shipping within Europe on October 25.

I use my Galaxy Note far more for reading than anything else. Very practical. I just read the Kindle when I am home.
I like how amazon does this. they sell their stuff at cost and massively promote their site. I personally have spent 2x more money on amazon ever since I got my kindle, so from my POV this model works well for them. Sucks for competitors though.
i never buy something from a B&M if i am ever given a choice.
i do use them almost exclusively as a showroom floor for things i want.
what that program did, was just give me a discount for doing what i was already doing.
The difference is that items were not discounted until the customer essentially expressed intent to buy it from a B&M store and scanned a B&M barcode and were then offered a further-reduced price via amazon's app. It's one thing for a customer to evaluate advertised prices and buy the cheaper one vs. a business (like Amazon) to ask a customer to conduct price-investigating (via their app), harvest that data, and then sell the item(s) at an arbitrarily reduced price just to beat the scanned-barcode price. IMHO, that's well beyond the ethical gray area of competing with other businesses. If Amazon can afford to sell it at a further-reduced price, why not just sell it at that price in the first place? And where's the limit? Again, I like the convenience of using Amazon for a lot of the things I buy, but I think people so blindly purchase through Amazon and get even more blinded by their good customer support and ease-of-use that they don't consider the consequences it has on local businesses that essentially become Amazon's un-paid, unofficial showrooms.
For $199, you just can't go wrong. I recommend buying one from Best Buy or similar store though, as my first one had a defective screen and I had to return it.
sounds like bait/switch to me. not sure how thats legal business practice.
B&M's have been doing this for decades.
They're not losing money by selling you the device. You pay for what it costs to make one + the retailer's profit.
Go compete with someone who doesn't care about making money on hardware.
no it isnt. Amazon is clearly not upfront about it. I cant just goto Macy's, find a lower price than amazon and call it in. I need a specific app, and i need to be specifically targeted.
this is shady business practice. Sell someone an item at MSRP for some people, other people sell at 10% off MSRP.