Do you know how the Kindle is believed to be sold at a loss? Everyone assumed that Amazon would make up the difference in content sales, and it looks like that might actually be the case.
RBC Capital has just released the result of a recent survey into KF owners and what they’re buying. According to their estimates, the KF should generate around $136 in net revenue over the course of a 3 year lifespan. And that’s net, not gross. It’s what is left after Amazon paid the suppliers and developers.
But before you get too excited, we should remember that this is an estimate. It does not prove anything more than the guesses made before the KF launched. It’s also based on a survey of only few KF owners who have only had their tablet for a couple months.
I’m not so certain that this number will pan out. If we take iTunes as a yardstick, the figure quoted above becomes doubtful. Apple reports earning 1 to 2 billion dollars from iTunes each quarter. They have also said that there are over 100 million iOS devices out there. Divide one number into the other and you don’t have a lot of income. In fact, a rough estimate places the per device iTunes income as far less than the KF estimate above.The iTunes gross is less than the KF net estimate above.