Feeds

Amazon's Bezos confirms content pays for Kindle

Finally admits hardware sold at cost

Security for virtualized datacentres

That Amazon makes little or no money selling its Kindle e-readers has been a popular assumption for some time. But assumption no longer - company chief Jeff Bezos has confirmed Amazon is after content sales profits instead.

The first Kindle was launched in April 2008 and cost $399 - £248 at today’s exchange rate - and follow-up models didn’t get significantly cheaper until October 2009 when Amazon cut the price of the Kindle 2 to $259 (£161) - still thought to be $75 more than the build price.

But in July 2010, Amazon released the Kindle 3 - now called the Kindle Keyboard - for $139/£111 and observers began to talk about book sales subsidising the price of the hardware. Disassemblies of these and subsequent Kindles showed that Amazon wasn’t selling the hardware at a loss, but it was clear it wasn’t making much money on the machines themselves.

However, Amazon would never confirm this. Now, in an interview with the BBC, Bezos has.

"We sell the hardware at our cost, so it is break-even on the hardware," he told the broadcaster. “We want to make money when people use our devices, not when people buy our devices.”

Of course, the same is true to a greater or lesser extent of most other e-reader makers who also sell e-books. The current pricing level of e-readers - largely defined by Amazon’s aggressive price cutting - makes that the case.

However, the majority of Amazon’s rivals use a nominally open DRM technology - it’s proprietary Adobe technology, but at least any third-party can make use of it - allowing users to purchase books from a variety of outlets.

Amazon, on the other hand, uses a unique DRM scheme, ensuring Kindle users can largely buy (DRM limited) books only from the one supplier. Apple does the same with its e-book shop.

To be fair, Amazon’s success in the market suggests most ordinary punters aren’t overly bothered by this at the moment. But it will be interesting to see how, as the e-book market expands, whether this lack of purchase freedom comes to matter, especially if Amazon beefs up its currently fairly weak, easy to remove DRM. ®

New hybrid storage solutions

More from The Register

next story
Apple iPhone 6: Missing sapphire glass screen FAIL explained
They just cannae do it in time, says analyst
Slap my Imp up: Bullfrog's Dungeon Keeper
Monsters need to earn a living too
Oh noes, fanbois! iPhone 6 Plus shipments 'DELAYED' in the UK
Is EMBIGGENED Apple mobile REALLY that popular?
Apple's big bang: iPhone 6, ANOTHER iPhone 6 Plus and WATCH OUT
Let's >sigh< see what Cupertino has been up to for the past year
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
The Apple Watch and CROTCH RUBBING. How are they related?
Plus: 'NostrilTime' wristjob vid action
Apple's SNEAKY plan: COPY ANDROID. Hello iPhone 6, Watch
Sizes, prices and all – but not for the wrist-o-puter
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.