Article is off base. Telling corporations to think about profit is like telling someone to think about breathing. It's always in Corporation's mind to think of profits. What differs here is the strategy. Profit in the long term compared to profit in the short term.<p>Apple is in a unique position to achieve one without compromising the other. But Amazon is not in that position. Majority of their business is reselling products, they need to make sure their platform is best at reselling products. Kindles are not the products they're selling, it is a platform they're using to sell products.<p>So, they're investing in platforms that will keep users loyal to the company and be a preferred destination for buying things. One can always analyze if this strategy is good for it's intended purpose or not, but that analysis is no part of the article. Discussion on this strategy is worthwhile.<p>Comparison with Walmart, to some extent, is fair. But brick and mortar sellers face very different challenges than the virtual shopping platform like Amazon.<p>EDIT: By "reselling product" I meant to convey "selling other people's products". Not the best choice of words.
The juxtaposition between hardware being the loss-leader over software, and vice versa, is interesting. The article states that "clearly one model is working and one isn't". I'm not sure if this is really the case. For example, in the games console business, the devices were loss-leaders for a long time, but at least Microsoft is now doing more than OK with its Xbox business - granted it took a while to get there. So, over time, loss-leader hardware isn't necessarily a bad strategy.
Interesting article. It basically cover loss leaders. Not news, but perhaps it was to apple.<p>HP gives away printers to sell ink.<p>Safeway cuts the price of bananas to 30 cents a pound so you'll buy overpriced oranges.<p>It appears the same with Amazon and the Kindle.<p>It's possible to make a great product, but lose money with poor strategic positioning. What makes Apple so much money is they nailed BOTH the product and the business model that allows them to make money.<p>It seems clear the business model mindset is there to stay. Will the product revolution continue? This is one reason the P/E is closer to that of a more mature company.