Originally Posted by aaarrrgggh
They only lose $50 or so when you include their R&D and marketing costs.
To paraphrase Frank Perdue's old TV chicken commercials, "Costs is costs."
Originally Posted by thataveragejoe
What puzzles me is why Amazon went so aggressive from the gate. If they had gone with even 249, they would have built a small profit and probably made at least 3/4 of the same sales anyway, and cut it to 199 in 6 months when the costs come down. Oh well, not my problem.
You've been mind-reading, well, my mind at least...
Originally Posted by kresh
Why? The Kindle Fire is not what compressed margins this quarter. Amazon's margins have been suppressed for the past few quarters due to the huge spending on physical warehouse construction, cloud infrastructure build-out, video on demand build-out, and feature discounts. Amazon continued this trend with $500 billion USD
in infrastructure expenditures..
Originally Posted by malax
Wow. You could buy a war in Iraq (maybe 2) for that kinda money.
We both picked up on those deep Amazon pockets! However, FTR, from what I've read, you could only buy about half of the Iraq war costs for that - not including all the VA and other vet benefits that will pile up over coming decades. The Civil War (1860's for the historically challenged) was still costing the US government money well into the 20th Century, and WWII (1940's) continues to be a source of payouts.
Originally Posted by Red Oak
Last, why do they continue to hide Kindle sales? If I was long, I would be pretty upset that they are hiding the economics and performance of a product that is fundamental to the prospects of the company. It's bizarre.
My question is how do they get away with this as a public company when this is clearly intended as a key strategic direction for the corp?
Originally Posted by slapppy
Yes, enjoy your moment of levity at my expense. Look carefully at these statements from Amazon. By the end of 2012, Amazon will surpass Apple iPad easily. Remember, thats just one company. There are many, many more Android powered Tablets coming in 2012. So, enjoy, revel, celebrate at my expense. By years end, most of you will be questioning why Apple has again failed and relegated back to a small minuscule market share.
1. Repeat yourself in the same paragraph much? (And actually those extraneous electrons are pushed "at AI's expense.")
2. Remind me again of Apple's recent "failing agains" and "miniscule market shares" on any strategic initiative.
- 90% share of models $999 and above. And for the last 4-5 years continually increasing US and world share (and on a trajectory to be #1 in the US).
b) MP3 player gizmo thingies
- stable over 70% (in a mature and declining market, where nearly all phones now include those functions).
c) Smart phones
- #1 profit share (by a country mile), and now blunting Android's share growth in the US and strongly growing sales around the world.
- over 70% even with competitors selling below costs and a new model just about to debut.
e) Content and apps
- number one music seller in the US (tho' video/movie content is still very competitive among a number of companies), far more app revenue per device than any other (read Android) platform and a huge lead in quality tablet apps, while it will take a year or more for a fairly large number of ICS-capable tablets to even be in consumer's hands. And the Mac App store seems a burgeoning success as well.
iAuthor, iBooks2 and the expanded iTunes U are also all looking promising, if not revolutionary.
f) The "cloud"
- after a number of false starts I believe I read there are already 85 million iCloud accounts, and iTunes match is going to be my web music repository of choice. (Though SugarSync is my off-line big backup solution and I don't believe any one company's going to dominate "cloud services" for awhile at least.)
g) The living room
- still a "hobby" and many viable or potentially viable competitors (X-Box, other boxes, Samsung TV's with modular plug-in firmware updates, etc., etc.) but many signs point to Apple's going "pro" in this arena sometime this year or next (and we'll see how they do).
- I believe Thunderbolt's still going to be the real deal and that Apple has and will hold the lead. And also that Apple's going to be first to market (or close to first) with 811ac Wi-Fi and the first "all day," "smaller than a bread box" 4G phone.
i) The "Enterprise"
- despite dropping server hardware and not giving the MacPro much (if any) love of late (if ever again), iPhones, iPads and MB Airs and Pros are making sizable inroads into big companies, and IT is finally starting to come to terms with them in both general and vertical areas (like Medicine, photography, etc.).
So actually, things have never looked better for Apple in the F500. (Allowing, of course, that MS, IBM, Oracle and others will continue to dominate the "big iron," productivity programs and infrastructure software areas.
j) Brick and mortar
- Apple stores have the highest revenue per sq. foot of any retail chain of its size or larger. Period. They're even tourist destinations, and in Hong Kong you have to enter a lottery for a chance to actually buy iPhones at the store.
And the chain is growing steadily around the globe.
i) Disappointments and areas to work on
- iAds, Ping, video calls over cell networks, Finder (STILL!), hiccups in video content distribution, and the release of an immature Final Cut redo that is admittedly biting them on the butt. But none of these are utterly strategic (except maybe Final Cut, and the iAd and video distribution spaces are going to be huge for someone[s]), so I'm going to stop there and allow the more critical to "populate this point" with whatever I've missed (or you think I'm missing).