Welcome!

@CloudExpo Authors: Liz McMillan, Zakia Bouachraoui, Yeshim Deniz, Pat Romanski, Elizabeth White

News Feed Item

Amazon Needs Only $3 of Monthly Margin from Apps to Achieve 20% Profit from Kindle Fire Experiment, According to ABI Research

Kindle Fire, which Amazon is widely reported to be sold at cost or below the margin, has been one of the most intensely followed technology product stories over the past year. A new study from ABI Research concludes that the cross-subsidized device model that Amazon uses is a viable strategy. According to senior analyst Aapo Markkanen’s calculations, the firm would need, on average, an incremental profit of about $3 in each month of a tablet’s lifespan to achieve an overall profit margin of 20%.

Markkanen comments, “Considering the probable margins of app and content sales, our research shows that Kindle Fire is a credible proposition. We expect that there will be a certain level of ‘innovation plateauing’ in mobile hardware taking place over the next five years, and that would certainly work in Amazon’s favor. Its future devices are likely to require less cross-subsidy than the ones we’ve seen so far.”

Amazon’s mobile strategy is distinctly two-pronged, since besides its own devices the company also offers a popular portfolio of apps running on all major OSes. ABI Research estimates that altogether the Kindle, Amazon Mobile, Cloud Drive, and Price Check apps have seen over 180 million downloads. The already established presence on mobile devices begs the question whether such a platform-agnostic approach would actually serve Amazon’s interests better than investment in a competing ecosystem.

Markkanen doesn’t think so, saying, “Kindle Fire may look like an aggressive push into a whole new market, but it’s more of a defensive play, born out of necessity. If Amazon bet its post-PC future only on the web and apps, it would be dangerously exposed to the likes of Apple and Google. Whoever controls the platform has a more frictionless relationship with the user, and that relationship can become real poison for any third party that relies on the same platform for its own business.”

These findings are from ABI Research’s Mobile Application Markets (http://www.abiresearch.com/research/service/mobile-application-storefronts/) Research Service. The service focuses on the distribution and the economics of mobile apps, providing data-driven insights on areas such as download volumes, revenues and business models, as well as trends within different applications categories.

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 70+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

CloudEXPO Stories
With more than 30 Kubernetes solutions in the marketplace, it's tempting to think Kubernetes and the vendor ecosystem has solved the problem of operationalizing containers at scale or of automatically managing the elasticity of the underlying infrastructure that these solutions need to be truly scalable. Far from it. There are at least six major pain points that companies experience when they try to deploy and run Kubernetes in their complex environments. In this presentation, the speaker will detail these pain points and explain how cloud can address them.
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-centric compute for the most data-intensive applications. Hyperconverged systems already in place can be revitalized with vendor-agnostic, PCIe-deployed, disaggregated approach to composable, maximizing the value of previous investments.
When building large, cloud-based applications that operate at a high scale, it's important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. "Fly two mistakes high" is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed how this same philosophy can be applied to highly scaled applications, and can dramatically increase your resilience to failure.
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by sharing information within the building and with outside city infrastructure via real time shared cloud capabilities.
As Cybric's Chief Technology Officer, Mike D. Kail is responsible for the strategic vision and technical direction of the platform. Prior to founding Cybric, Mike was Yahoo's CIO and SVP of Infrastructure, where he led the IT and Data Center functions for the company. He has more than 24 years of IT Operations experience with a focus on highly-scalable architectures.