Amazon Kindle Fire HD called 'ambitious,' but unlikely to dethrone Apple's iPad

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  • Reply 81 of 88

    Quote:

    Originally Posted by anantksundaram View Post


    You shouldn't, if the business model is inherently unsustainable.



     


    Curmudgeon was talking as a consumer. As a consumer he probably likes the selection and pricing. Unless I am buying something expensive, I don't care if they go out of business tomorrow.  I will rely on the manufacturer warranty.


     


    You seem to be talking like an investor. 

     

  • Reply 82 of 88

    Quote:

    Originally Posted by r00fus View Post



    The LTE yearly plan is amazing. I have absolutely no idea how Amazon is going to foot that bill, or how they got AT




    The higher $499 price of the 32gb Fire HD basically subsidizes the LTE service.  Considering what we know about about the cost of tablet manufacturing, that model probably costs around $350 to make. Lets say Amazon is paying AT&T $100 for the LTE service, the customer paying Amazon $50 /year on top of that.  Amazon may have $50 profit on this high end model.

  • Reply 83 of 88
    solipsismxsolipsismx Posts: 19,566member

    The higher $499 price of the 32gb Fire HD basically subsidizes the LTE service.  Considering what we know about about the cost of tablet manufacturing, that model probably costs around $350 to make. Lets say Amazon is paying AT&T $100 for the LTE service, the customer paying Amazon $50 /year on top of that.  Amazon may have $50 profit on this high end model.

    Why would Amazon being paying AT&T an additional $100 per device? When you run the numbers AT&T is already getting more per GB than they charge for the iPad save for the lowest option of 250MB that is intended to push you toward a higher tier. It's over $16 per GB which is over 60% more than what AT&T charges for an additional 1GB.

    You might say that if AT&T is charging iPad users $15/month for 250MB then they would require Amazon's customers to do so, but that rationale is erroneous. One, for the reason stated in the previous paragraph, and two, AT&T is getting $50 up front. It's a one year contract that they get regardless if customers use that data or that device. With the iPad it's month-to-month which inherently is a less secure way for companies to secure payments, which is why companies like AT&T love to subsidize your phones and will let you out of your current contract early providing you sign another two year agreement.
  • Reply 84 of 88
    john.bjohn.b Posts: 2,742member


    As of Saturday night, Ars is saying that Amazon changed their tune (again) and will let people pay $15 to remove the ads:  http://arstechnica.com/gadgets/2012/09/amazon-backtracks-will-remove-ads-from-kindle-fire-for-15-fee/


     


    Quote:

    Originally Posted by BanExtremists View Post




    The higher $499 price of the 32gb Fire HD basically subsidizes the LTE service.  Considering what we know about about the cost of tablet manufacturing, that model probably costs around $350 to make. Lets say Amazon is paying AT&T $100 for the LTE service, the customer paying Amazon $50 /year on top of that.  Amazon may have $50 profit on this high end model.



     


    Agree.  There is no way $50 covers the annual cost of the 4G plan.  My guess that Amazon is subsidizing about $100 for the $50/year 250MB 4G plan, and the other $100 covers the increase in memory and the addition of the 4G/LTE radio.  There is still no information how much the 2nd year or 13th month will cost.

  • Reply 85 of 88
    john.b wrote: »
    Agree.  There is no way $50 covers the annual cost of the 4G plan.  My guess that Amazon is subsidizing about $100 for the $50/year 250MB 4G plan, and the other $100 covers the increase in memory and the addition of the 4G/LTE radio.  There is still no information how much the 2nd year or 13th month will cost.

    What's your rationale that 3GB of prepaid data would cost $150 when it's only around $30 from other vendors?
  • Reply 86 of 88
    john.bjohn.b Posts: 2,742member

    Quote:

    Originally Posted by SolipsismX View Post



    Why would Amazon being paying AT&T an additional $100 per device? When you run the numbers AT&T is already getting more per GB than they charge for the iPad save for the lowest option of 250MB that is intended to push you toward a higher tier. It's over $16 per GB which is over 60% more than what AT&T charges for an additional 1GB.

    You might say that if AT&T is charging iPad users $15/month for 250MB then they would require Amazon's customers to do so, but that rationale is erroneous. One, for the reason stated in the previous paragraph, and two, AT&T is getting $50 up front. It's a one year contract that they get regardless if customers use that data or that device. With the iPad it's month-to-month which inherently is a less secure way for companies to secure payments, which is why companies like AT&T love to subsidize your phones and will let you out of your current contract early providing you sign another two year agreement.


     


    I don't buy it.  AT&T might take $150/year for a prepaid 250MB/month plan, but I've seen nothing in the past three years as an AT&T customer that makes me believe they would take $50/year when the going rate is $15/month.


     


    No, there has to be a subsidy in there somewhere...

  • Reply 87 of 88
    john.bjohn.b Posts: 2,742member

    Quote:

    Originally Posted by SolipsismX View Post



    What's your rationale that 3GB of prepaid data would cost $150 when it's only around $30 from other vendors?


     


    My rationale was that 250MB would cost $150/year.  The going rate on a monthly basis works out to $180/year.

  • Reply 88 of 88
    cpsrocpsro Posts: 3,198member


    IMHO Amazon is grossly committing false advertising. The new Fire models won't be distributed for nearly 2 months, until November 20th, yet on the company's home page, the present tense is used throughout: "Kindle Fire HD 8.9" 4G isn't just the best tablet for the price, it's the best tablet. $499 now gets you a large-screen HD tablet with a stunning 8.9" display, exclusive Dolby audio, dual stereo speakers, the fastest Wi-Fi, ultra-fast 4G LTE wireless, plus our new unprecedented $49.99 one-year 4G data package. Customers save hundreds of dollars in the first year compared to other 4G tablets. Kindle Fire HD 8.9" is also available in a Wi-Fi only model for $299."

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