[Rumor] Amazon Tablets Could Potentially Sell as 'Loss-Leaders'

[dgstorm]

There are some rumblings from within Amazon that their upcoming Android Tablets could be sold as "Loss-Leaders". For those unfamiliar, what that term means is that Amazon will actually sell the tablet at a loss initially, with the intention of making profit from accessories, downloads, ebooks, multimedia and cloud storage instead of the device. In fact, the speculation suggests that they may sell the tablets for as much as 20-25% less than what it costs them to make the devices. Between the Kindle ebooks, UnBox movie downloads, software bought through the Amazon Appstore for Android, and cloud store revenue and advertising, Amazon could not only make up for the loss but turn a tidy profit in just a two year period of ownership.

This could be a potentially risky maneuver; on the other hand, it could be a brilliant way to storm into the market, quickly become the top Android Tablet, and compete toe-to-toe with the iPad. We won't have to wait too long to find out, as the first Amazon Android tablets are due to come in the fall or winter of this year.

Source: Amazon-Tablets.com via SlashGear