Is Kindle Fire burning up Amazon's profits?

Selling out of the initial shipment of five million Kindle Fire's probably cost the company $200 million and there is a distinct lack of hunger for profit in its strategy.

Amazon's reporting that its Kindle Fire has been a smashing success, with the product selling out at most major US retailers. With the tech heavyweight now set to lift the lid on the new Kindle Fire and quite possibly a smartphone, Horace Dediu wonders how much Amazon is paying for its success.

Last September I argued against the potential of the Kindle Fire acting as a low end disruption in the tablet market.

Now that the first version of the product has reached is end of life, it’s time to review the discussion.

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