Re:Kindle Fire HD hurts Microsoft more than Apple
by Tloewald on Sunday September 09, 2012 @08:29PM
(#4497648)
The consumer doesn't care what the business model is. Microsoft's problem is that all its entry points into the market are being taken away. If it wants to go cheap it has to deal with the $299 Fire HD and the $199 (sort of) Nexus 7. Apple already straddles $399-$499. Those are brand name competitors with premium products and decent or better ecosystems.
It's not clear what Amazon's business model is. Bezos claims he wants to make money on content and not lose too much on devices, but he's losing money on Prime too. It seems to me Amazon's model is to get as much market power as possible -- ideally a monopoly -- and then charge rents, but I don't see how any such monopoly would be sustainable (at least without the DOJ foolishly helping). The one area where Amazon (temporarily) held a near monopoly was ebooks and this is precisely what it did (it still tries, only more subtly).
It's not clear what Amazon's business model is. Bezos claims he wants to make money on content and not lose too much on devices, but he's losing money on Prime too. It seems to me Amazon's model is to get as much market power as possible -- ideally a monopoly -- and then charge rents, but I don't see how any such monopoly would be sustainable (at least without the DOJ foolishly helping). The one area where Amazon (temporarily) held a near monopoly was ebooks and this is precisely what it did (it still tries, only more subtly).