Why a Cheap Kindle Could Cost You Hundreds Extra
Amazon’s strategy with its Kindle e-readers and tablets has always been pretty clear: bring in more customers, even at a loss, so long as they partake of the online retailer’s panoply of services, from e-books to streaming movies. Unlike rival Apple, which sells its devices at a premium, Amazon has seemed more or less happy to break even or lose money on its devices. Now, a report based on research by Consumer Intelligent Research Partners (CIRP) shows how shrewd that strategy may be.
CIRP surveyed 300 U.S.-based Amazon customers over a period of three months this fall. Based on the results, the firm estimates that Kindle owners spend about $1,233 per year on the site, compared with $790 for Amazon members who do not own one. In other words, Amazon members with Kindles spend $443 more annually.
“Another way to look at Kindle Fire and Kindle e-Reader is as a portal to Amazon.com,” Josh Lowitz, CIRP’s co-founder, wrote in a release. If that is the case, Amazon’s strategy appears to be as effective as analysts have suggested.