According to Amazon support forums Kindle Fire return rates are anywhere from 25-50% and remember Amazon makes ZERO EBITA on each and every single unit. It's a pathetic business model. Apple kills the entire tech industry.
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Microsoft diversification
- Thread starter smoledman
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According to Amazon support forums Kindle Fire return rates are anywhere from 25-50% and remember Amazon makes ZERO EBITA on each and every single unit. It's a pathetic business model. Apple kills the entire tech industry.
So Amazon doesn't tell shareholders or the media how many Kindle Fires were sold or returned, but it does post this information on its own customer forums?
Interesting.
Any chance you have some proof? Because so far all you're doing is proving my post right in that you never have anything to back up your rather insane claims.
I'd be happy to be proven wrong.
Yeah I don't see him responding to this.
How I know the numbers were pull out of his of someone else's rear end.
1. The fact Amazon never released those numbers.
2. "proof" comes from a forum.
3. The large range in the number as amazon would know it down to a 5% range easily
4. The impossibly high number in the return rate. People may not be happy with a product but they are also lazy and as such not going to mess with returning it to get anywhere close to 50% return you would need 100% disproval of it and we all know that is not the case. People are very lazy and returning something requires effort.
Funny that you attack smoledman for lack of proof by bringing up some speculation of a Wall Street analyst. We all know how accurate they are when it comes to tech business.
Are you sure about that? I read something by some person on some internet forum somewhere that the return rate for Apple's iPads was near 90%.
The figures in that article weren't made up. Other articles confirm similar.
By bringing up an invalid point that the only thing that the public wants is an iPad you changed the topic. Now proven wrong on that point, you wish to change it back.
Amazon said they sold "over 1 million Kindle" devices per week in December. All kinds of Kindle devices.
If we assume half of those were Kindle Fire (which IMO is unlikely, I think it's less), that would be around 2 to to 2.5 million KF. Not the 5 or 6 they are pulling out of their @$$.
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Yes, they actually could do that. Sitting on your thumbs and doing nothing helps protect your shareholders from the loss of jumping into an industry that you can't be marketable in because of your warped view of the needs and expectations of the users in that market. Case in point: Zune. Crappy name, crappy colours, crappy support, crappy options, crappy accessories... Coming out of the gate with a brown color was just disastrous. It literally was a turd. Then the many software rewrites and constantly 'moving the cheese' and changing things dramatically. You could almost feel the flop sweat looking at the boxes.
The one thing about the iPod (non-Touch) is that the interface has stayed virtually the same from device to device with minor updates and additions. (Scrolling and coverflow to name two) The iPod Touch interface is extensible and customizable. You can have pretty much everything that you want in whatever place you want it on those devices, yet the operation of the interface (look and feel) has largely stayed the same over time.
I'd comment that it's hard to perfect perfection but consistency is not to be dismissed. I can pick up a friends new iPod Classic and know exactly how it works because I had an earlier iPod Video... I know how the iPhone works because I've had a Touch. I know how the iPad works because of the Touch and the iPhone. It's like someone really got it at Apple, and the people at Microsoft just kept throwing stuff on the wall and waited to see if it stuck.
And Microsoft has nearly always had a server market, and don't dismiss their hardware market too. Some of which has helped in their software business through remotes and such. Heck, after IBM dumped out of the PC market, and their keyboards sunk to the level of everyone else's crap, Microsoft keyboards were the last great keyboards available (aside from some Keytronic models), and Microsoft set the standard for mice for a very long time. My second mouse on my first iMac was a Microsoft two button mouse because I hated the 'crippled' Apple one, where the scroll wheel was taken as a necessary function, and not a toy like the crazy small ball Apple used at the time. (Interesting how Apple validated the right-click without physically acknowledging it through the 'Magic Mouse'. Love that mouse now...
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And what no one knows, or that Amazon is willing to say, is how many of those Kindle Fire purchases were returned for an iPad, or even some other tablet, or notebook device... That would be an interesting bit to know, and very hard to figure out.
1. as i mentioned before, you can't use EBITDA as an actual metric for a product. operating cash flow takes into account costs directly attributable to the product (COGS) and costs not attributable to the product (OPEX). we don't know how Amazon allocates their OPEX. at best, you can evaluate a product's profitability based on Gross Margin = Rev - COGS.
so for example, the iPhone sells for $700 and the COGS is $200. the Gross Margin on the iPhone is $500. Say OPEX is another $100.
Rev - COGS - OPEX = $600
now lets say air freight costs suddenly ballooned because oil prices spiked and increased OPEX 3x...
Rev - COGS - 3(OPEX) = $200
a. the iPhone is no longer a profitable phone because EBITDA is now $200
b. the iPhone still is profitable since the Gross Margin didn't change, but unexpected operational difficulties impacted the company (or business unit) and caused the decrease in EBITDA
which one are you going to choose?
if you are talking about a product stop using EBITDA.
2. why would Amazon be willing to take negative margins on the Fire? look at it this way. hardware is not their bread and butter. if the hardware giants Samsung, HP, and HTC are having troubles, it is reasonable to assume that as the new guy Amazon would probably get even lower margins than those three.
instead of farting around trying to gain operational efficiencies or negotiate for significant hardware volume discounts, why not create a tablet which will leverage Amazon's competitive advantages?
Apple runs iTunes at a break even or slight loss because there's no point for them to try and make money off $0.99. iTunes is just there to help drive hardware sales. Amazon will run the KF at a break even/slight loss because there's no point in competing with the existing players. KF will drive users to spend money on books, music, movies, and whatnot on Amazon... where the company make the majority of their sales.
3. you can not evaluate Microsoft based only on their consumer products just as you can not evaluate Apple only on their enterprise offerings. one is software focused and the other is hardware. a software focused company will have lower operating leverage thus easier to achieve operating profit, but each additional sale will not have much impact on EBITDA. a hardware focused company will have higher operating leverage thus harder to achieve operating profit, but each additional sale will have significant positive impact on EBITDA. asking Microsoft to bring in $13B is like asking Apple to lower their fixed costs to Microsoft's level. not going to happen... their cost structures are different.
4. you're really off the mark with a lot of your questions and statements. i don't know if you're in high school, college, working or what... but go enroll in some business/finance/strategy classes and learn the basics of analyzing companies. seems like you're at least interested enough to mention EBITA... that's a lot better than the usual margins/market share/stock price arguments i see around here.
so for example, the iPhone sells for $700 and the COGS is $200. the Gross Margin on the iPhone is $500. Say OPEX is another $100.
Rev - COGS - OPEX = $600
now lets say air freight costs suddenly ballooned because oil prices spiked and increased OPEX 3x...
Rev - COGS - 3(OPEX) = $200
a. the iPhone is no longer a profitable phone because EBITDA is now $200
b. the iPhone still is profitable since the Gross Margin didn't change, but unexpected operational difficulties impacted the company (or business unit) and caused the decrease in EBITDA
which one are you going to choose?
if you are talking about a product stop using EBITDA.
2. why would Amazon be willing to take negative margins on the Fire? look at it this way. hardware is not their bread and butter. if the hardware giants Samsung, HP, and HTC are having troubles, it is reasonable to assume that as the new guy Amazon would probably get even lower margins than those three.
instead of farting around trying to gain operational efficiencies or negotiate for significant hardware volume discounts, why not create a tablet which will leverage Amazon's competitive advantages?
Apple runs iTunes at a break even or slight loss because there's no point for them to try and make money off $0.99. iTunes is just there to help drive hardware sales. Amazon will run the KF at a break even/slight loss because there's no point in competing with the existing players. KF will drive users to spend money on books, music, movies, and whatnot on Amazon... where the company make the majority of their sales.
3. you can not evaluate Microsoft based only on their consumer products just as you can not evaluate Apple only on their enterprise offerings. one is software focused and the other is hardware. a software focused company will have lower operating leverage thus easier to achieve operating profit, but each additional sale will not have much impact on EBITDA. a hardware focused company will have higher operating leverage thus harder to achieve operating profit, but each additional sale will have significant positive impact on EBITDA. asking Microsoft to bring in $13B is like asking Apple to lower their fixed costs to Microsoft's level. not going to happen... their cost structures are different.
4. you're really off the mark with a lot of your questions and statements. i don't know if you're in high school, college, working or what... but go enroll in some business/finance/strategy classes and learn the basics of analyzing companies. seems like you're at least interested enough to mention EBITA... that's a lot better than the usual margins/market share/stock price arguments i see around here.
That is true but Google is able to do all those products because of their dominance in search. Google's business model is such that everything is designed to support search.