VoIP Phones

The Hardware Dilemma

Amazon announced a new Kindle that would be free for Prime users (on April Fool’s Day). It was free for Prime customers. With Prime membership of $79 per year or so, the customer gets free 2-day shipping; a bunch of shows and movies for free; and a kindle library to read one book at a time free. Now the device is free.

Hardware has been rocketing to no profit for a while. Polaroid was the first to realize this. HP learned it with printers – sell the printer at cost and make all your margin on consumables (in this case ink and toner).

Microsoft did the same with XBOX. Sell it at cost and make money on the Live service, games, etc. Consumables and service – the recurring revenue stream.

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