Thursday, September 6, 2012

Amazon's Risky Bet on Profit-Free Hardware


Cnbc’s Jon Fortt writes: Nobody else seems to be saying it, so I will: Amazon and Google are playing a dangerous game.  The name of that game: Profit-free hardware.  We've come to know the results as the Kindle Fire and the Nexus 7.

Today at Amazon's event in L.A., we expect to see the next phase of its vision, even as Google ramps up shipments of its tablet. Both have 7-inch screens, running different versions of the Android operating system. Both started out costing about $200 to make. And both have sold for about $200.

Both Amazon and Google can do this — for a while. They can do it because they have high-growth, multi-billion-dollar revenue businesses. Amazon booked $12.8 billion in net revenue last quarter, and Google $12.2 billion….

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