Linked by Thom Holwerda on Thu 29th Sep 2011 20:19 UTC
Internet & Networking Other than the low price (only $199?!) and the fact that Google is getting absolutely nothing out of Amazon's use of Android, I couldn't really bring myself to caring too much about the Kindle Fire (Apple and/or Microsoft patent lawsuit in 3... 2... 1), but there is one aspect that intrigued me - Amazon's beefing up of what at its core is Opera Mini.
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RE[3]: ...
by kittynipples on Fri 30th Sep 2011 12:35 UTC in reply to "RE[2]: ..."
kittynipples
Member since:
2006-08-02

This could actually be a legal problem for Amazon down the road. If Amazon is in fact selling these things for below cost, I could see lawsuits for anti-competitive behavior coming from some other tablet vendor who doesn't have comparable ways to recoup losses. Amazon's massive bundled service infrastructure definitely has the potential to push fringe hardware competitors out of the market if they can leverage those services to sell their tablets below cost.

I have no idea whether or not any such suit would be successful as proving predatory pricing is very difficult, but I imagine there has to be some limit to how far you can take this "razor blade" model as being legitimate competition.

Reply Parent Score: 1

RE[4]: ...
by Morgan on Tue 4th Oct 2011 03:39 in reply to "RE[3]: ..."
Morgan Member since:
2005-06-29

I doubt it.

Back in the grand old days, with the NES and later SNES Nintendo introduced the "loss-leader" concept to the video game market, where the game system was relatively inexpensive and the games were the real profit bringers. This practice carried over to the other console manufacturers like Sega and later Sony. In fact, from what I remember only the Neo Geo was priced for a profit on the console itself, and it was damn near unaffordable at ~$600. They didn't sue Nintendo, Sega or Sony for selling loss-leader hardware from what I recall.

That's not to say it won't happen here, but again I doubt it. It's been in practice for nearly 30 years now in the tech field (not to mention the razor blade manufacturers as you mentioned) and I don't see it being challenged by other companies in court.

That's not to say it won't be challenged in the field though. Brother laser printers, for example, use chipless "dumb" cartridges that seem to be designed to be refilled by the consumer; all you have to do is pull an easily accessible plug, fill with toner and replace the plug, and reset a gear on the side. A Philips screwdriver and five minutes of your time save a lot of money. That combined with the fact that their cartridges are also very inexpensive to begin with, and the printers themselves are great quality, and you have honest pro-consumer competition against the gouging tactics of HP, Lexmark and Samsung.

Edited 2011-10-04 03:39 UTC

Reply Parent Score: 2