An important bit of environmental history to remember on earth day.
"Amazon.com has said little about the economics of its Kindle business, but a new study suggests that the profit margins on the e-reader device are likely generous — and leave room for future price cuts.
On Wednesday, technology research firm iSuppli released a "teardown" analysis on the Kindle 2 that estimates the manufacturing cost for the device at about $185. That's slightly more than half of the $359 that Amazon charges for the product, though the teardown estimate does not include the costs of any software or royalties on the product. It also does not include any fees that Amazon is paying to Sprint Nextel, which provides wireless access for the device.
"The 'so what' of this is that it shows that Amazon is making a profit on both the razors and the razor blades," said Citigroup analyst Mark Mahaney. "This is close to the high end of the margin range that we had estimated."
"Costco charges a membership fee before customers can take advantage of the great values it offers. Users pay it willingly once they see the benefits. I think newspapers could take a page from Costco's book. But instead of offering a range of benefits to their users, newspapers are still selling subscriptions to their print products rather than membership in an information company that can help people do everything from save money on groceries to pick the best school for their child to report road conditions in real time. How many newspapers have all the e-mail addresses and cell phone numbers for every household they serve? And how many actually ask the owners of those addresses and numbers what theyâ€™d like to receive and when?"