Why Amazon isn’t earning a penny from Kindle Sales

Internet retailing giant Amazon has always been a pretty secretive beast when it comes to sales figures and how it makes its money.

But, last year, it opened up to reveal it has sold more than a million Kindle’s every week during a three week period. Consider that Kindle is now in its fifth generation and we’re talking some serious money.

Despite those huge sales figures though, Wall Street has always believed Amazon doesn’t actually make any money from its Kindles – how else, after all, could it possibly bring the Kindle Fire in for £129 when the iPad costs upwards of £399?

And now, Amazon has confirmed its sales strategy for the first time. The company has revealed that it will not make a profit from the sales of its latest Kindle tablet and e-reader gizmos, instead making its money from online content sales.

“We sell the hardware at our cost, so it is break-even on the hardware,” said chief executive Jeff Bezos. It’s an aggressive policy designed to get Kindle tablets into the hands of as many people as possible, so they can go on to buy games, books and video from Amazon.

Meanwhile, talking of successful gizmos, this next one seems to have been a victim of its own success

It has just scooped the coveted Innovation of the Year award in the prestigious T3 Tech Awards. But customers waiting for their Raspberry Pi’s are facing massive delays, according to reports.

The gizmo beat off huge competition from the likes of Microsoft Windows 8 and the Renault Twizy to get the coveted title.

Judges at T3 were impressed with the world’s smallest and cheapest PC because of the “world of possibilities” it opens up for developing economies. Based around a single core 700Mhz processor and 256MB of RAM, a basic model costs just £30, and is designed to help youngsters across the globe learn programming languages.

It also gives gadget geeks the chance to tinker with PC hardware just like transistor radios became the in thing in the 80s and 90s when kids discovered radio waves.

But, according to the International Business Times, frustrated customers who ordered their Pi’s in June are still waiting for them to be shipped.

“Customers put their names down on the order lists months ago, and some of them are still waiting for their orders from RS Components. And it seems they may have to wait until November, possibly, for orders placed in July,” says Margot Huysman of the IBS.

And, disgruntled consumers have taken to the Pi forums to voice their annoyance. Raspberry Pi has now posted a letter on the forum, telling customers: “We have been advised that our next batch of approximately 40,000 Raspberry Pi’s will now be arriving during September, with further deliveries expected in October. This delay is due to the very high level of demand on the core Raspberry Pi processor chip.”

But while getting your hands on the Pi seems to be as difficult as finding a job can be in current economic climes, other gadgets could have just become a whole lot easier to buy.

In what may not be significant itself as the gadgets in question are relatively old, a new court ruling could make it difficult to slap sales bans on devices caught up in so-called “patent wars”.

The US Court of Appeals has overturned a ban on Samsung’s Galaxy Nexus phone, meaning Apple could find it very difficult to have rivals’ products pulled from the shelves in future.

But, whatever its woes in the courts, it seems consumers are still clambering for a bit of Apple’s technology – and not even mapping or charging issues can put them off.

A new survey by 451/ChangeWave Research has found that Apple’s iPhone 5 continues to sell at “record” rates compared to past iPhone launches after surveying 4,270 North American consumers.

A whopping third of respondents said they were likely to choose an iPhone 5 as their next smartphone, with no one saying lightning charger issues would put them off and, considering how much media attention the issue has received, only 3 per cent said mapping was a “very big problem”.

There’s more good news for Samsung too though, with more than half of respondents saying if they did opt for a Windows Phone 8 brand, they would be going for a Samsung device.

So, the war between Samsung and Apple for consumers’ hard-earned cash is hotting up in the run up to Christmas. Which one will be on your list to Santa?

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