Briefly: Simon & Schuster settles; 9M Galaxy S III preorders; 10.1" Kindle Fire

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  • Reply 41 of 81
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by aaarrrgggh View Post





    Amazon's business model is about driving volume to create a business without competitors. Their logistics infrastructure is impressive to say the least, and this is made possible by creating huge volumes of sales. Prime builds loyalty, and Amazon is willing to lose money on loyal customers in the short term if it helps them create the base for long-term domination. I believe the $11 figure was from 3 years ago; I would expect it is less now.

    If you didn't take the long-term perspective on it, why would they be trading with a 3 digit multiplier.


     


    Long view is fine. Their impressive infrastructure is impressive.


     


    But if they are losing money on the hardware and on the contents (the $11 number is from last year but let's say they're down to $5), how long would it take for them to make that up? Hardware like Kindle has a life of 2-3 yrs max. If Prime builds loyalty, that means they lose money for a longer period of time! Something doesn't compute, unless they're counting on these members buying scores of other products. But Kindle is their top selling item!


     


    I'm 100% certain Amazon accountants and MBAs have figured out how they will eventually make money out of this. But perhaps all the estimates and analysis of how they will do this are wrong (as they usually are). Perhaps the assumption of a loss leader model is not entirely accurate. Just sayin' ...

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  • Reply 42 of 81
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by dasanman69 View Post





    It might be a problem if it was just kindle owners but anyone with the kindle app can benefit regardless of hardware and platform.


     


    So you're saying the Kindle app on the iOS and Android platforms is subsidizing the Kindle hardware? Then why make and sell the hardware reader?

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  • Reply 43 of 81
    sockrolidsockrolid Posts: 2,789member

    Quote:

    Originally Posted by AppleInsider View Post



    [...] A Samsung official reportedly told the Korea Economic Daily off the record that customers had placed roughly nine million preorders of the company's Galaxy S III handset across over 100 carriers globally, as noted by Reuters. [...]


     


    Crushing the life out of all other Android hardware makers.  (Hey HTC, enjoying that beautiful spring weather down in Mexico?)


     



    Quote:

    Originally Posted by AppleInsider View Post



    [...] Overall, Samsung represented roughly 40 percent of Android devices monitored by the app maker. [...]



     


     


    My point exactly.


     




    Quote:

    Originally Posted by AppleInsider View Post



    [...] Amazon is reportedly making the move to "focus its competition against Apple's iPad," the publication cited industry sources as saying. The insiders also said that the 8.9-inch model had been meant to challenge Samsung's Galaxy Note tablets. [...]


     



    Challenge the Galaxy Note?  LOL.


     


    No need to challenge the Galaxy Note.  It's already self-challenged.

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  • Reply 44 of 81
    dasanman69dasanman69 Posts: 13,002member
    So you're saying the Kindle app on the iOS and Android platforms is subsidizing the Kindle hardware? Then why make and sell the hardware reader?

    Never thought about it that way, that's a good question, one I don't have a answer to.
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  • Reply 45 of 81
    gatorguygatorguy Posts: 24,772member

    Quote:

    Originally Posted by SockRolid View PostChallenge the Galaxy Note?  LOL.


    No need to challenge the Galaxy Note.  It's already self-challenged.



    The Galaxy Note tablet will be a different product than the Note smartphone.


    http://www.itproportal.com/2012/05/16/galaxy-note-101s-performance-could-crush-rival-tablets/

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  • Reply 46 of 81
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by dasanman69 View Post





    Never thought about it that way, that's a good question, one I don't have a answer to.


     


    Bezos is no dummy. There's more to this than meets the eye. I just think the whole loss leader analysis is over simplified.

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  • Reply 47 of 81
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by SockRolid View Post




     


    Challenge the Galaxy Note?  LOL.


     


    No need to challenge the Galaxy Note.  It's already self-challenged.



     


    I am surprised by how often I see this beast. More often than I see Motorola phones these days.

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  • Reply 48 of 81
    jragostajragosta Posts: 10,473member
    dasanman69 wrote: »
    Most people couldn't care less if Amazon had a near-monoploy and how or why they kept prices low. They wanna know why the "introduction of competition caused prices to rise" when its supposed to lower them. Its pretty hard to convince them that a 30% price increase is better when you're not offering a better service or product than the competition.

    Fortunately, the DOJ doesn't have to convince the average person - they only have to convince the court. Monopolies often look like good deals at first - until the monopolist starts doing things like driving all the profit out of the publishing industry and causing publishers to disappear or gouging consumers in other ways to make up for their losses.

    I don't quite get the theory that Amazon is selling at a great loss. They'd have to sell quite a few eBooks and songs to make up the difference. Even then, they'd never have the margin that Apple has. However, this loss-leader theory becomes truly suspect in cases where a Kindle owner is also a Prime member. Amazon reportedly loses $11 per Prime member. So how does it make up for this loss and the loss in hardware costs?

    Something doesn't add up. Bezos is not an idiot. Perhaps analysis about its loss leader modus operandi is not accurate.

    Re the bolded, I assume you mean 'books and songs', not 'ebooks'. You don't come out ahead when you're selling something at a loss - no matter how many you sell.

    And the results show it. AMZN's gross margin is 23% and operating margin is 1.4%. AAPL is 44% GM and 35% operating margin.
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  • Reply 49 of 81
    capnbobcapnbob Posts: 388member

    Quote:

    Originally Posted by jragosta View Post





    It doesn't matter. My points still apply.

    1. If they had sold that many, this would be an official press release rather than a fourth hand report.

    2. When the iPhone 4S was released it had less than half as many preorders in spite of worldwide hype. You couldn't open a newspaper or magazine without seeing something about the iPhone 4S. It is implausible that the G3 would have sold as well with essentially no mention in the media at all.


     


    I believe the number but you are not comparing Apples to Apples (sic)... Apple has never released the carrier pre-order number. The 1M consumer preorders and 4M sales in the first weekend are completely different numbers to this one. If Apple did release an equivalent number then it would probably be 25M (about 2 months production) as the 9M is for the GS3 (ramping up to 5M per month production). Carriers knew the 4S would fly off the shelves and ordered accordingly... thus 37M sales in 2011Q4 - mostly the 4S. We just don't happen to know the actual number since no-one ever thought that was a relevant number before Samsung started anonymously leaking random numbers that make it sound like the GS3 is more successful than the 4S (which it patently is not). I won't even do half of the iPhone launch numbers at its very best (although that will be much better than the GS2 and Samsung will be ecstatic).


     


    I also agree with ThatAverageJoe that Samsung is the #1 threat to Apple (not Google - esp. when Samsung forks Android) and they will not only overall sell a lot of smartphones (more than Apple) but is every quarter increasing the share of high-end phones in those overall numbers. A year ago, it was less that 25% GalaxyS-class, and I bet that with the GS3 it will be up to 40% (GS/GS2/GS3) which is why Samsung's profit levels and shares are rising so strongly. I would bet that in another year, Samsung will probably have a similar profit share of the industry to Apple since it will sell more overall smartphones (as it crushes other Android OEMs) and even with Apple's superior margins, will approximate its overall performance. Note, in Q4 Apple/Samsung 75/15% Q1 73/26% as Samsung's overall $ profit also increased greatly.

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  • Reply 50 of 81
    gatorguygatorguy Posts: 24,772member

    Quote:

    Originally Posted by jragosta View Post

    They publicly admit that they were selling an entire category of products at below their cost.

    That's predatory pricing.


    So you really did just made that one up then, since you've avoided an answer or a citation? 

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  • Reply 51 of 81
    jragostajragosta Posts: 10,473member
    gatorguy wrote: »
    So you really did just made that one up then, since you've avoided an answer or a citation? 

    I forgot. You're incapable of using a search engine.


    http://www.investorwords.com/3770/predatory_pricing.html

    "An anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product low enough to end a competitive threat."
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  • Reply 52 of 81
    drdoppiodrdoppio Posts: 1,132member

    Quote:

    Originally Posted by Capnbob View Post


     


    I believe the number but you are not comparing Apples to Apples (sic)... Apple has never released the carrier pre-order number. The 1M consumer preorders and 4M sales in the first weekend are completely different numbers to this one. If Apple did release an equivalent number then it would probably be 25M (about 2 months production) as the 9M is for the GS3 (ramping up to 5M per month production). Carriers knew the 4S would fly off the shelves and ordered accordingly... thus 37M sales in 2011Q4 - mostly the 4S. We just don't happen to know the actual number since no-one ever thought that was a relevant number before Samsung started anonymously leaking random numbers that make it sound like the GS3 is more successful than the 4S (which it patently is not). I won't even do half of the iPhone launch numbers at its very best (although that will be much better than the GS2 and Samsung will be ecstatic).


     


    ...



     


    This is a very reasonable interpretation of the numbers, IMO.


     


    Quote:

    Originally Posted by Gatorguy View Post


    So you really did just made that one up then, since you've avoided an answer or a citation? 



     


    He made it up, as usual. I can remember quite a few recent threads where he made outlandish claims and bailed out without supporting them. Better ignore this fine example of the Dunning–Kruger effect.


    Edit: While I was writing this, you've gotten an "answer". Not to the question you asked, typically.

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  • Reply 53 of 81
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by jragosta View Post



    Re the bolded, I assume you mean 'books and songs', not 'ebooks'. You don't come out ahead when you're selling something at a loss - no matter how many you sell.

    And the results show it. AMZN's gross margin is 23% and operating margin is 1.4%. AAPL is 44% GM and 35% operating margin.


     


    I did mean eBooks. I appreciate your analysis. But ...


     


    Making up losses in Kindle by selling books is a rather expensive marketing scheme, given they already have a virtual monopoly on selling books. To my simple mind, you have to make the Kindle proposition work by selling contents on it. Otherwise, there must be cheaper ways of marketing to sell more books.


     


    But like I said, we don't know the true story. After all, why do we dismiss most speculative stories about Apple products and yet buy into this one about Amazon losing their shirt on Kindles?

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  • Reply 54 of 81
    tallest skiltallest skil Posts: 43,388member

    Quote:

    Originally Posted by ankleskater View Post

    After all, why do we dismiss most speculative stories about Apple products and yet buy into this one about Amazon losing their shirt on Kindles?


     


    Because they refuse to report their numbers.

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  • Reply 55 of 81
    gatorguygatorguy Posts: 24,772member

    edit
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  • Reply 56 of 81
    gatorguygatorguy Posts: 24,772member


    Originally Posted by jragosta View Post





    Amazon had a near- monopoly and kept prices low via predatory pricing. Introduction of competition is what caused the prices to rise.


     



    Originally Posted by Gatorguy View Post


    Amazon raised their prices to compete with Apple pricing? Interesting theory. . .


     


    You keep claiming Amazon practices predatory pricing, an illegal act, yet give no supporting proof. Do you have some or just "making stuff up"?



     



    Originally Posted by jragosta View Post



    They publicly admit that they were selling an entire category of products at below their cost.

    That's predatory pricing.

     


     


    Originally Posted by Gatorguy View Post





    I've not seen that. What's your link to the statement that Amazon made? I'd like to read it for myself.



     



    Originally Posted by jragosta View Post





    I forgot. You're incapable of using a search engine.

    http://www.investorwords.com/3770/predatory_pricing.html

    "An anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product low enough to end a competitive threat."


    I forgot you have a problem with admitting fault.


     


    I ask for your link to Amazon's public announcement that they're selling any entire line of products below cost, proof that they're breaking US law as you claim, and you can only offer a definition for predatory pricing?? I thought you might have been mistaken with your original assertion, but with your latest answer I'm more convinced you sometimes just make stuff up and assume no one will notice.  This was one of those instances apparently.

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  • Reply 57 of 81
    island hermitisland hermit Posts: 6,217member

    Quote:

    Originally Posted by ankleskater View Post


     


    It's a good point. But Motorola, Samsung, HTC, Sony, etc. are all on equal footing when it comes to Android (although Moto will soon have an inside track). Yet, Samsung has assumed a gargantuan lead. So I don't think it's Android that's giving Samsung the advantage to go head to head with Apple.  I suspect Samsung would be where it is now if Windows Mobile 7/8 had come out earlier and had assumed the place where Android is today.



     


    Well, in that case Microsoft and Samsung would be equal competitors to Apple.


     


    Hardware giant... absolutely... but I don't believe for a minute that Samsung could get the software right without a partner.

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  • Reply 58 of 81
    cash907cash907 Posts: 893member

    Quote:

    Originally Posted by genovelle View Post


    It may mean lower prices for those who want to buy from Amazon until they run everyone else out of business, again. This would mean, less reasons for writers to write and publishers to publish. The truly great artist would prefer to sell their creations by themselves than support a system where they make one company rich and not even have access to the rest of the market or even be able to sell their own product for a reasonable price themselves because Amazon wants to use it as a loss leader. 



     


    Well let's take a quick look at two books, and their ebook counterparts.


     


    Calico Joe by John Grisham is onsale right now for $14.23 in Hardcover, and $12.99 in ebook format. A difference of $1.24.


    Drift by Rachael Maddow is onsale right now for $15.00 in Hardcover, and $12.99 in ebook format. A difference of $2.01.


     


    Does that sound like fair pricing to you, Gen?

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  • Reply 59 of 81
    wakefinancewakefinance Posts: 855member

    Quote:

    Originally Posted by jragosta View Post





    I forgot. You're incapable of using a search engine.

    http://www.investorwords.com/3770/predatory_pricing.html

    "An anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product low enough to end a competitive threat."


    Hahahaha really?  You have to do better than that.  Where is the link showing Amazon admitting that they were using predatory pricing?

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  • Reply 60 of 81
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Because they refuse to report their numbers.



     


    Apple also does not release its COG. Furthermore, a company's reticence does not lend credibility to speculations.

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