Apple puts forth a responsible ebook business plan but Amazon needs the Justice dept to take it down - now they get to discount all those ebooks so they can be loss leaders once again using a product that is a loss leader!
You got to hand to to amzn's leader he really likes to "invent" things for consumers - what they "invented" is a new mousetrap that looses money.
The best part is that AMZN will have opened itself up to a very aggressive content price war from Apple and Google. Neither makes their money on content, but since AMZN adopted a loss leader strategy attacking their core, they have ample right to respond. Needless to say, they have more cash, a larger installed base and a superior ecosystem... They will win.
If you read the article I just posted, you'll see Apple is matching prices. Just the beginning. Wonder what Amazon's ROIC is going to go to when Apple and Google carve into Amazon's existing digital content sales and all it is left with is capital intensive warehouse/logistics on low value added goods that now collect sales taxes....
Kind of hard for them not to after having been ordered by the DOJ to stop price fixing.
"when Apple and Google blah, blah..."
Google? You mean that tout of yours you said was supposed to outperform? Google is up only 5% year to date. You need to stop touting your dud picks and worry about the $25 per share you have lost on your most recent short position against Amazon.
LOIC - loss on invested capital - they are fighting wars on two fronts - physical merchandise and electronic and will loose on both fronts. They are less efficient in both camps and they keep digging themselves a bigger and bigger hole. More warehouses, more logistics, more services, more engineers, more advertising spend, more optimization, more free services - and for what?
Bezos said best tablet on the market regardless of price - well then, why not actually profit from the thing! He wouldn't want to jeopardize "long term" strategy, of course not. Look everyone will be buying stuff with this thing so get it in their hands, right? For what? Proof will be in quarterly report after report that demonstrates. proves beyond anyone's doubt, they are less efficient and will return little cash or profit to stakeholders.