NEW YORK (TheStreet) - Every time Amazon (AMZN) announces a new Kindle tablet or e-book reader there are experts who believe the company is selling those hardware products as a loss-leader to get customers to buy lots of books, music and apps to fill up device memory. Today, Amazon's boss put half of that rumor to rest.
Amazon CEO Jeff Bezos, in an interview with the BBC, said his company's Kindle Fire and Paperwhite book reader make no profit. But, he insists that they do break even.
Bezos was interviewed at the launch of the company's new e-Ink-powered Paperwhite reader in the U.K., France and Germany.
The Amazon supremo believes his company's subscription services are the big difference. Especially the Kindle Lending Library. That's where you can borrow (up to) one book a month from a group of specially-selected titles. The Paperwhite's biggest competition comes from the similar Barnes & Noble (BKS) Nook Glowlight and the Kobo Glo.He told the BBC: "We want to make money when people use our devices not when people buy our devices." That's the polar opposite of how Apple (AAPL) markets its goods and services. The Cupertino, Calif.-based firm has indicated that much of its profits come from hardware sales while its iTunes store operates at "slightly above break even." Manufacturers making devices that run on Google's (GOOG) Android OS depend on hardware profits as well. Bezos boasted that Kindle fans also read more books of all kinds. He told the BBC that Kindle owners read four times as many books - electronic and paper editions - as non-Kindle owners. European deliveries of Amazon's new Paperwhite e-reader begin in two weeks. --Written by Gary Krakow in New York. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV