So I Bought a Kindle Fire


There have been two firmware updates for the Fire so far, and the first one (6.1) supposedly improves the UI performance a great deal. That's probably why it's running better for you now-- the difference is supposed to be very noticeable.


Wasn't 6.1 the day-one patch that auto-installed on release two weeks ago?

6.2 was released yesterday and apparently removes the ability to easily root the device.


The more I use the Fire for everyday tasks the more I am convinced that it is the size that keeps my iPad2 collecting dust. Yea, the apps work and it is nice and everything, but I am also certain that if there was a seven inch iPad, I'd be all over that.


Why is this? Because it's easier to hold? Because it fits in a pocket?

The problem is Apple sells the iPod Touch for about $180 and that's half the size of the Fire. Given Apple's profit padding they'd probably want $299 for an iPad the size of the Fire. And we may have a 9" Fire for that price next year.


FWIW, I have both a Nook Tablet and an iPad and I much prefer the bigger size of the iPad for browsing. I use the tablet for reading and occasional checking of the weather while laying in bed.


I use my tablet as a notebook (paper) replacement. For that it is much easier for me to use in widescreen than the iPad, I can type more effectively with the smaller size, and it is easier to maneuver. I also read with it and my biggest complaint going from Kindle 2 to iPad is that it is sooo much heavier. The Fire is also heavier, but not by quite as much.

I actually use the web browser in the Fire a lot more than I did the iPad. Not sure why, but I have no problem surfing various sites in widescreen mode on the Fire. Maybe the weight makes it easier for me, not sure.

I haven't really used Netflix on the Fire much, but I didn't really use it much on the iPad either.

I would pay a premium over the Fire to get a seven inch iPad. The Fire with my leather cover is about the same size as my old planner, so maybe that has something to do with it.


For me it's the opposite - I love the Fire's size because it's perfect to read web sites in portrait mode. Especially the mobile Google Reader site.


(gah double-post!)


Not really profit padding when Amazon is selling for a loss with some really, really cheap barebones hardware, is it?


This is why Amazon can and will sell these things at a loss.


"Amazon's $199 Kindle Fire costs $201.70 to build, report says"

That is not much of a loss really.


I just googled it, and while these things are never 100% accurate, one estimate is that the iPad costs Apple about $325. So selling at $499 is close to a 50% margin. So yeah, I think Apple builds in a very healthy profit. That seems to be their business model.


That is 35%, not 50%. Their profit margins in their reports indicate 30%. So what is wrong with that?


This is me. Getting something cheap, no taxes, and with free two-day shipping (and only $3.99 for next day) has changed my shopping habits. I even ordered something and it showed up at my door on a Saturday - didn't even know that was possible. I check Amazon first when I want to purchase something. Just bought a new Logitech K360 wireless keyboard from them on Sunday, showed up today.


There's nothing wrong with it. There's nothing wrong with a 70% profit margin either, as long as it's not something vital, like medicine. Consumers have the right to choose.

What I was getting at is that if Apple tried to compete on price with Amazon, they would have a tough time under their current business model. I'm neither condemning nor condoning either Amazon's or Apple's business models, merely speculating about how Apple might have difficulty competing on price with the Fire if Apple came out with a 7" tablet.

Also, I guess I'm bad at math, but if you buy something at $10 and mark it up 50%, what does that mean your selling price is?


Me being a complete idiot. :)

But yeah, I would take the 30% margin they report to shareholders as the real margin.


Margin and markup are two different rhings - margin is the difference in price and cost divided by the price while markup is divided by the cost. So Nawid A was right and Mark was just using the wrong term.


Cost of goods estimates always need to be taken with a grain of salt. Actual numbers are highly proprietary. Especially in the case of Apple, where they throw down billions of dollars in hard cash up-front to ensure dedicated capacity and negotiating weight.

This has become painfully obvious in the tablet arena. Apple maintaining price parity with the competition results in a hefty profit margin advantage for Apple.

I wouldn't be surprised if some of the Android tablet makers are making less money per device in profit than they are paying Microsoft for patent royalties. From what I understand about what Microsoft has been doing, I'm really rooting for B&N's epic multi-pronged legal battle.


Doesn't surprise me I got the terms wrong.

Anyway, the relevant point is that Apple's business model is to make a healthy profit per unit sold, and Amazon's model seems to be to sell the unit at cost and make the profit on selling goods through the device. That gives Amazon a pricing advantage. Apple, of course, has other advantages that may offset that. It's likely that a lot of Fire owners might have opted for a $299 7" iPad if one was available.

It's good to have some tablet competition at least. Maybe we will see a lower price for the current iPad 2 when the iPad 3 launches.


I'm betting this is what's going to happen. $399 iPad 2.