Price wars in Tablet PC market

Facts have proven that Amazon did it. There are a lot of sales data for many party predicted it would reach 4 million to 5 million, the specific of Amazon Kindle Fire sales data is still hidden, but it has declared that Kindle family of products had more than 1 million units in shipments in December week, of which Kindle Fire, Kindle Touch, Kindle 4 ranked separately123.

For consumers, Kindle Fire is the first choice without the iPad--not because of the reflective screen, not because of the weight, not because of little storage space, simply is because of the price. Due to low price, from the date of birth of Kindle Fire, it was compared with the iPad. However, I have to say that the Kindle Fire has the same shortcomings with ipad, though Kindle Fire can support Flash, but it still can not play dvd movies on kindle fire directly. If you simply want to buy recommendations, CNN has made it very clear--"If you're just in order to go online and consume online content, Fire is good for you, or the iPad". But the fact is that in addition to purchasing recommendations, price has a lot of discussion.

It is simple idea for consumers, they may not have to think about the manufacturer's policy, of course, there is no need.

What is strategy for producers? In the article in August, from cost control, sales model, business model, four aspects of eco-system, I explained the possibility of Amazon price, where the revenue model is the most critical factor. What is Amazon's profit model? Service, and hardware is only secondary. Some readers in the comments section countered possibilities of "software was subsidized hardware", because, apart from some video game manufacturers, nobody has ever done. In fact, Amazon really did. We knew Kindle Fire BOM is 202 m, plus the labor cost, transportation charges, traffic-free synchronization fees, losses is not more than $ 3/.

Around the "big e-commerce", Amazon has been "tit for tat?" intransigence is the norm.

On November 7, B&N publishing Nook Tablet, product was integrated with Pandora ,Netflix, Hulu and these third-party video services, content building are better than the Kindle Fire that only has Amazon Prime. But this advantage is only retained for 4 days, Amazon only needed 4 days to get these three companies, and also on the basis of more than two: Rhapsody music service, sports ESPN ScoreCenter.

On December 26, Apple began to make the annual limit-free promotions in the United Kingdom, and Canada and other countries, this practice survived for 4 years. Amazon United Kingdom gave tit for tat, it made the same sales cycle and the promotion was more aggressive. The original cost Ebook was 5-20 pounds, after a few rounds at a discount, the price all was less than 3 pounds, minimum reached GBP 0.99. Apple limited from only one article a day, limited within 24 hours for purchasing; Amazon in addition to the overall time limit, a single book did not limit to buy time, and it had a wide variety, all of them were best-selling novel. Besides, Amazon also offered the free kindle fire movie converter for users.

You can see from these two examples, for maintaining its own core interest, Amazon was not soft.

First, if the Kindle Fire pricing $ 300 can be hot-selling, why not make the 100 dollar? The question is priced $ 299, $ 249, for stimulating the role of markets are not as large as $ 199. This conclusion must be listed on the Kindle Fire before after a heated argument.

Second, what is the core interest? Content sale, the profit of the hardware is not core interest. Now we don't know the hardware and content of the relationship between profit and loss, but from eBook sales eventually exceeded paperback trends, online content sales subsidies back hardware sales, but also the same trend.

Third, you really lose money? In the long run, if after 5 years, even 3 years later, loss of hardware from Kindle Fire, Amazon owns several hardware products, is not a separate financial accounting.