Amazon.com, Inc. (NASDAQ:AMZN) released its new Kindle tablets earlier this week and tech enthusiasts seemed pretty happy. The company released a new line of tablets powerful enough to compete with offerings from Google Inc (NASDAQ:GOOG), and it dropped the price of the Kindle Fire HD to $139, an astoundingly low price. Investors with faith in Amazon must still be wondering what the devices are for exactly.
If the analysts are to be believed, Amazon.com, Inc. (NASDAQ:AMZN) is going to be in everything from advertising to groceries to video streaming to IT services in the comping years. The company’s purview knows no bounds. It is unrestrained, and it doesn’t care all that much about making a profit. The Kindle Fire HD probably makes no money per unit for the company at $139. But it will put a lot of Amazon tablets in hands.
Amazon integrated empire
Amazon.com, Inc. (NASDAQ:AMZN) might be too complicated of a company to project even five years into the future. The company’s guiding principle right now is to invest time and money into everything, find out what works and keep doing it. The tablet business isn’t just that, however, its one of the focal points of the Amazon strategy.
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With an Amazon tablet in their hands, every user will have instant and directed access to the Amazon.com, Inc. (NASDAQ:AMZN) retail empire as well as the 100 other Amazon products out there. Amazon may not be using the Kindle tablet range to sell more, it might be using it to test its sales strategies.
At $139 for a high quality device, Amazon.com, Inc. (NASDAQ:AMZN) has blown open the tablet market. The company is likely to sell millions of the computers to market segments more disassociated with the company. That gives them a lot more room to test their advertising, media selling and retail businesses.
An end to Amazon testing
Low-priced tablets are the perfect mechanism to get the Amazon.com, Inc. (NASDAQ:AMZN) brand into the minds of consumers and to get the company’s products into their hands. There is an essential problem for investors, however: Amazon doesn’t make much of a profit.
Investors are betting that the testing stage will put Amazon.com, Inc. (NASDAQ:AMZN) ahead in a large amount of business categories, but nobody seems sure when the grand experiment will end. That is the crux of the matter for those thinking about putting money into the retailer.