Amazon founder and CEO Jeff Bezos often has been criticized for selling products at below market prices and making up that loss on volume. That, of course, is impossible. In addition, Bezos has been accused of wasting money on free shipping of products bought by consumers on Amazon as a way to build online market share without a profit. He has been attacked also for launching too many products without focusing on a few. Each and every one of these is true. Bezos does not seem to care. He claims he wants to make Amazon a great and successful company for decades and not years. For that, he is willing to sacrifice margins.
The Fire HDX will be released before the holiday season is in full swing, which gives Amazon the best chance to capture maximum sales. In a way, that does not matter. If the product does indeed lose money, Amazon will lose a lot. It already has put the HDX on the homepage of its site, which gets tens of millions of visitors a month. That, by itself, will guarantee millions of HDX sales.
From day one, Amazon has promoted the HDX as an entertainment device for music, TV and movies. It has been tethered immediately to “Amazon Instant Video,” the e-commerce firm’s challenge to a wide a array of companies, including Apple and Netflix Inc. (NASDAQ: NFLX). Bezos knows that if this strategy works, Amazon can become the equivalent of a nationwide cable network — a position that should be wildly popular, and one that would sharply increase the Amazon top line.
The most powerful weapons Bezos has are the Amazon brand and its hundreds of millions of customers. Many of these customers are potential buyers for the Fire HDX. That, in and of itself, makes the product a hit before it is released.
Fire HDX features from Amazon:
Exclusive 7″ HDX display (1920×1200), high pixel density (323 PPI), and perfect color accuracy (100% sRGB) for vivid, lifelike images that go beyond standard HD
The fastest processor on a 7″ tablet — powerful 2.2GHz quad-core processor and 2GB of RAM for fast, fluid multi-tasking, gaming, and video
Introducing the “Mayday” button — revolutionary, on-device tech support. Connect for free to an Amazon expert 24×7, 365 days a year
Stay productive on the go with ultra-fast web browsing, built-in OfficeSuite, and updated e-mail and calendar support for Gmail, Outlook, and more
Immersive entertainment experience — see trivia and character backgrounds with X-Ray for Movies and TV, follow along with lyrics with new X-Ray for Music, fling videos to your TV with Second Screen, and more
In addition to Free Two-Day Shipping, Prime members enjoy exclusive digital benefits, including the new ability to download Prime Instant Videos.
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