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Image representing iPad as depicted in CrunchBase

Image via CrunchBase

Here is a great example of how businesses are prepared to accept not making money on some products i.e. break even, for the sake of others. In October 2012, Amazon launched its Kindle Fire tablet and its Paperwhite e-reader in the UK and other European countries. The Kindle Fire retails at about £150, which is probably less than half the price of an iPad and about £100 cheaper than an iPad mini. In an interview with the BBC , Amazon’s boss Jeff Bezos said the company sells its hardware at cost i.e. they break even. This may explain the cheaper price of the Kindle Fire compared to the iPad. However Amazon earn profits on Kindle book sales, Kindle book rentals and its Prime service. In contrast, Apple have noted they break even on services such as iTunes and make profits on their hardware,