Seeking Alpha
  • Paulo Santos
    Nice AMZN is going head on against AAPL with the Kindle fire HD.
    9/6/12
    Reply (24)
    • Canary Cash: The wifi is critical, apple tv + ipad sucks at times for gaming because of it (unless 3d + vid compression 4 mirroring is too much 4 proc)
      9/6/12
    • Paulo Santos: This might spark a price war, we'll see.
      9/6/12
    • Paulo Santos: Jeff Bezos seems willing to risk his entire company on this.
      9/6/12
    • Canary Cash: Wild
      9/6/12
    • Ashraf Eassa: Are you still short AMZN, Paulo? It looks like an attractive short at these levels.
      9/6/12
    • Paulo Santos: Am and nothing changed my mind, these won't add earnings. And they increase AMZN's risk substantially.
      9/6/12
    • Paulo Santos: Also, announcing products today to ship Nov 20, seems like those aren't ready either. As we suspected with the Google Nexus 7 ...
      9/6/12
    • Paulo Santos: ... leading to a redesign.
      9/6/12
    • Whitehawk: I want one, but I want it today, not Nov. 20. The 7" will apparently be available next week.
      9/6/12
    • Paulo Santos: No, only the old one will be available next week. The HD ones are for Nov 20. I guess the prices include the expectations the HD panels ...
      9/6/12
    • Paulo Santos: ... will become cheaper between now and then.
      9/6/12
    • J Mintzmyer: The most important question imo is what is the breakeven cost per unit? If it's above $250 gross than disaster will ensure....
      9/6/12
    • Paulo Santos: Obviously it's more than $250 (for the $299 unit). After all, AMZN can't have lower costs than Apple.
      9/6/12
    • J Mintzmyer: Actual numbers will be interesting. Most of this leaks eventually. My guess is close to $250, marginal gross,not net marginal or total/unit.
      9/6/12
    • J Mintzmyer: Who knows what net marginal or total unit breakeven (r&d, etc) would be.... Doubt that stuff ever comes out.
      9/6/12
    • Ocean Man: I heard someone say today that AMZN makes money once a Fire buyer buys 2 books.
      9/6/12
    • Paulo Santos: Even if it could be true, that makes little sense - because it's not just about making >$0, this is about making $ billions.
      9/7/12
    • J Mintzmyer: Ocean- if that's true... that's pretty impressive. Does that include the $300 Fire HD? Or the old Fire? I can definitely believe the latter.
      9/7/12
    • Ocean Man: It was repeated on CNBC this morning. It's their answer to negative margins on the devices. If they average over 2 books per device....
      9/7/12
    • Paulo Santos: It depends on what costs one includes. The teardown of the iPad3 put its cost (for the most basic version) at $316, and AAPL should have ...
      9/7/12
    • Paulo Santos: ... lower component costs than AMZN, due to in-house CPU and much larger component buying (much of it shared with the iPhone).
      9/7/12
    • J Mintzmyer: I wonder what kind of books as well? Did they take their average profit per book sold? Or did they find their highest margin books? Plus say
      9/7/12
    • J Mintzmyer: they make $5/bk gross, well that's $310 gross for the KindleHD. But that's not net for either book or Kindle. Sales, G&A, shipping, taxes...
      9/7/12
    • J Mintzmyer: Plus that figure values the r&d at zero....
      9/7/12
      From other sites