12 Oct 2012
Story image

Kindle fails to catch fire

Amazon has confirmed their latest Kindle tablet and e-reader device releases will not make any profits for the company.

Speaking as the firm launched its new Paperwhite e-reader across Europe, CEO Jeff Bezos says the company hopes to make money from the products after they are sold.

The move is in direct contrast to that of rivals Apple, who ordered 10 million iPad Minis earlier this week from Asian suppliers, more than double as many products as Amazon’s lower-priced version.

Combined with Samsung's expected forecast of over six million Galaxy Note II tablet sales during the current quarter, and Microsoft's impending move into the hardware industry, Amazon appears to be struggling to define itself in the market.

But Bezos believes the devices' success will be judged on how many books and other media files that are subsequently bought by their owners.

Speaking to the BBC he said:

"We want to make money when people use our devices, not when people buy our devices.

"We sell the hardware at our cost, so it is break-even on the hardware."

"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."

Despite the stance, Apple has revealed many times during the years that the majority of its profits come from device sales not its iTunes store, cast doubt over Amazon's plans.

Is the Kindle Fire performing as expected? Tell us your thoughts below

Recent stories
More stories