Chief Executive Officer at Amazon.com, Inc. (NASDAQ:AMZN), Jeff Bezos said during the launching ceremony of Kindle Fire HD, that the Amazon (AMZN) does not earn profit when it sale its devices, in fact these devices help its customers to purchase different products and services offered by Amazon which help the company to boost its revenue.
There is no doubt about the quality of e-book readers and tablets sold by Amazon but the actual thing is that theses devices play a key role in attracting its user towards services and products offered by Amazon.
Due to high competition, there is very little profit margin left for the companies in the market. The only reason why the companies like Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) are successful in the market is because what Apple Inc (AAPL) brings in the market, no other competitor is able to bring because it makes best of the best and that is the reason it is getting more than 27 percent margin on all the devices it sells. On the other hand Amazon is successful because it earns profit through its products and services that it is offering through its devices.
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