Of course Amazon is going to have less free cash this quarter. The point of having buckets of cash is so you can buy in bulk, and get a discount. And the Kindle Fire needs a lot of bulk buying (back of the envelope calculations, at least $175 million, maybe nearer $200 million given the growth in gross sales). But that bulk buy will drop costs along the board, and while the Kindle Fire tablet may be sold at cost, the long term profit from giving everyone a personalised storefront, is going to far outweigh a small profit drop. Quite frankly, … Continue reading Straight out the Apple playbook, Amazon spend on the Kindle supply chain
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Straight out the Apple playbook, Amazon spend on the Kindle supply chain
Of course Amazon is going to have less free cash this quarter. The point of having buckets of cash is so you can buy in bulk, and get a discount. And the Kindle Fire needs a lot of bulk buying (back of the envelope calculations, at least $175 million, maybe nearer $200 million given the growth in gross sales). But that bulk buy will drop costs along the board, and while the Kindle Fire tablet may be sold at cost, the long term profit from giving everyone a personalised storefront, is going to far outweigh a small profit drop. Quite frankly, … Continue reading Straight out the Apple playbook, Amazon spend on the Kindle supply chain