Via Scoop.it – internetbillboards
In doing so, it has copied one of the most famous strategies in business history: the idea, pioneered by safety razor inventor King Gillette more than a century ago, that a company can sell one product at – or even below – cost to secure customers for more profitable products or services for which it can make repeat sales.
In Amazon’s case, that means slashing the price of its tablet to just $199 – far below the $499 price tag on the cheapest iPad. At that price it will make little or no money, even on devices it sells directly from its own website, according to Wall Street analysts.
But from digital books to its music and film services to its online retail store, Amazon has plenty of ways to make its users pay. “The primary concern for Amazon is to support its ecosystem and sell more content,” says Carolina Milanesi, an analyst at Gartner. “This is what the Kindle Fire was created to do: be a good platform for content consumption.”
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