Amazon would have to be blind to their own success selling one type of virtual good to kindle owners for them to not care about selling another type of virtual good to kindle owners.
As others have pointed out, the fact that they went through the trouble of building their own App Store proves they care deeply about app sales.
What's more, the low margins on the kindle fire prove they not only care about app sales (and book sales, and movie sales, and music sales), they're relying on them.
Amazon will do very well on digital goods sales. But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets.
Amazon is going to recoup their costs through additional commerce on Amazon.com. That's what people use tablets for and it's a massive market that Amazon actually has leverage in. It's a very calculated move to build a tablet first and not a phone. The real target is driving more sales on Amazon.com
But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets.
I think it's important to keep this in mind. As successful as Apple's app store has been, 1 billion in profit is still relatively small potatoes. Android's significant outpacing of Apple in sales despite a much weaker app market underlines this.
It's not dumping because it's not Amazon doing predatory pricing across geographies. It's subsidization. They're subsidizing the cost of the hardware to drive sales on Amazon.com
Comments
"Amazon does not care about app sales"
Amazon would have to be blind to their own success selling one type of virtual good to kindle owners for them to not care about selling another type of virtual good to kindle owners.
As others have pointed out, the fact that they went through the trouble of building their own App Store proves they care deeply about app sales.
What's more, the low margins on the kindle fire prove they not only care about app sales (and book sales, and movie sales, and music sales), they're relying on them.
Amazon will do very well on digital goods sales. But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets.
Amazon is going to recoup their costs through additional commerce on Amazon.com. That's what people use tablets for and it's a massive market that Amazon actually has leverage in. It's a very calculated move to build a tablet first and not a phone. The real target is driving more sales on Amazon.com
But apps are actually a small chunk of dollars in the grand scheme of things -- especially on tablets.
I think it's important to keep this in mind. As successful as Apple's app store has been, 1 billion in profit is still relatively small potatoes. Android's significant outpacing of Apple in sales despite a much weaker app market underlines this.
> What's more, the low margins on the kindle fire s/low/negative/
They are betting their entire tablet strategy on by losing money on each hardware sale.
Can someone tell me why this isn't considered dumping [1]?
[1] http://en.wikipedia.org/wiki/Dumping_(pricing_policy)
It's not dumping because it's not Amazon doing predatory pricing across geographies. It's subsidization. They're subsidizing the cost of the hardware to drive sales on Amazon.com