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Amazon (AMZN) Not Selling Kindle Fire at Profit, CEO Says

 October 12, 2012 10:33 AM
 


(By Balachander) Amazon Inc. (NASDAQ:AMZN) Chief Executive Jeff Bezos has reportedly disclosed that sales of the online retailer's Kindle e-reader are at cost, a statement that several Wall Street analysts have already figured out.

"We sell the hardware at cost, so it is break-even on the hardware" Bezos told the BBC. "We want to make money when people use our devices, not when they buy them."

Last month, Amazon.com unveiled the Kindle Fire HD in two variants, a move designed to take a huge piece of the pie in the tablet market from Apple (AAPL).

The company launched the all-new Kindle Fire HD 7-inch tablet for $199 and also a new variant -  Kindle Fire HD 8.9-inch that starts at $299 and Kindle Fire HD 8.9-inch 4G that starts at $499.

[Related -Updating Amazon AMZN Gap into Fibonacci Support]

Both the 8.9-inch versions of Kindle Fire HD will be available for shipping on November 20. 

Bezos' remarks to the BBC confirmed Wall Street speculation that the company did not make money from sales of the popular tablet.

By contrast, Apple's iPad tablets are priced between $399 and $829, and the company generates much of its earnings from sales of hardware.

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