Bezos: Kindle HDX Won't Make Money, and I Don't Care
Amazon's new tablet may have a price hike, but that won't help its profitability says CEO Jeff Bezos.
By John Fortt
Amazon.com is launching a new version of its Kindle Fire tablet—but with an unusual twist for the market that might leave consumers scratching their heads.
Amazon's upcoming high-end tablet, the Kindle Fire HDX, will pack a bunch of new features, including one called Mayday that will allow users to video chat with tech support and fix their devices from wherever they are.
"You can press this button, and a tech support advisor will appear on your screen and copilot you through anything you might wanna do. They can draw on your screen, show you how to do things," Bezos told CNBC.
The 8.9-inch tablet will also have a high-res screen and an 8-megapixel camera on board.
But that catch? A price hike from $299 to $379, which is about a 25% increase.
Despite the jump, Bezos said Amazon does not make money on the devices themselves, but the company does hope they will usher users toward Amazon's main business: creating and delivering digital content, like Kindle e-books, movies, TV shows, and music.
"We think we're better aligned with our customers if we make money when people use our devices, not when they buy them," he said.
For those for whom the new Kindle may be a bit too rich, Bezos said the $139 Kindle Fire HD will now come with the high-res screen found on last year's top-shelf model.
The new products and prices will renew Amazon's competition with Apple in the tablet market, where the iPad remains a legacy of Steve Jobs.
Yet Bezos does not subscribe to the "myth" of the lone visionary CEO that surrounded Jobs, arguing that most product innovation come out of collaborative work.
"You know, there's a saying, 'Failure is an orphan and success has many fathers," he said. "'That's a very true saying. And it-- it-- and it captures something very deep, that anything at large scale that gets done and is successful, you can count on the fact that there genuinely were many fathers."
He credits some of Amazon's best new ideas to three separate all-day book clubs he maintained with other senior executives over the summer, where they would discuss business and strategy books and how the ideas relate to the company's future.
"And those books really just become frameworks," Bezos said. "They're kind of skeletons that we can end up using to talk about the business. So, those were great conversations. It gives all of us a chance to get to know each other better. And then, of course, you know, we have lots of brainstorming sessions."