[ippisl]

This number is meaningless(and probably wrong) if you don't know the extra profits it would generate, and what's at stake here.

Some estimates(read:guesses) think that 50% of kindle users will subscribe to to amazon prime. Prime users are extremely loyal to amazon, do all their online shopping in amazon and use brick and mortar shops much less than before signing with prime.They tend to buy 3x-4x than before, in amazon.

Prime is a very hard service to provide. It requires a big and expensive logistics chain. It's a monopoly level competitive advantage. It can make amazon a monopoly in the range of walmart (maybe).

Also the kindle fire is a great advertising unit. Better than TV - because the ads can be much more targeted, And you can buy with a single click from the ad.

Combine the two, and amazon gets almost total control of the customer.

And given Bezos's brilliance that's probably only the tip of the iceberg.

So what's a little discount on a little gadget to get all of this ?

[joelhooks]

And when they (we) are in store they break out the Amazon app, scan barcodes and have items shipped next day at a sizable discount over the store cost + sales tax.

[eupharis]

That 50% number seems high to me. Seems chicken-and-egg. Do they buy a Kindle then subscribe to Amazon Prime or do they use Amazon a lot and thus get both a Kindle and Amazon Prime?

And like most chicken-and-egg questions, the answer is both and neither.

As someone who has spent far too much time puttering around brick-and-mortar stores recently, before walking away in disgust and just buying it on Amazon, I can't help but think Amazon is just spending to widen an already vast competitive edge.

This isn't apples versus oranges. This is sailboat versus steamboat.

[ippisl]

When you buy a kindle fire , you get prime free for 30 days. after that, you need to subscribe.

Yes, the 50% is high, but people who tried prime are really , really happy with it, so maybe 50% makes sense.

And yes, it's definitely cars vs horses.