In a time long ago, Amazon was a book seller. They've continued to sell paper books while becoming the leader in ebooks, but they also sell a multitude of other products. In the past, most of Amazon's business was selling media like books, music, and movies. Now those "other" products make up the majority of the online retailer's sales. The news came in Amazon's earnings call today when it was also announced that they smashed projections by rocking a 46% revenue increase over last year.
Overall, Amazon took in $3.43 billion in sales from media, and $3.51 billion from everything else. Many analysts have expected this so-called "inversion point" to occur eventually. Amazon benefits from this in that they have a solid buffer in the face of the changing media landscape. It's no secret that Amazon liked having the eBook business all to themselves, but they'll never have that kind of comfortable perch again.
Certainly people are buying all sorts of things from Amazon. What are getting there? Still just books and DVDs? Or have you started buying your electronics from Amazon as well?
Move over Gamestop and make room for...7-Eleven? As crazy as it sounds, your local convenience store will soon begin selling used games priced under $20.
It's part of a new promotion called "Great Games Under $20" in which 7-Eleven has partnered with Game Trading Technologies to outfit half of its stores -- about 3,000 total -- with used videogames.
"What this means to consumers is that they will have many convenient locations, most open 24/7, to buy value-priced videogames," said Game Trading Technologies president and CEO Todd Hays. "The program is available to all 7-Eleven US franchisees, and we hope to have most US stores on board by September."
This isn't the first time 7-Eleven has sold videogames. The convenience store chain tried its hand at selling new games starting in late 2008, but got off to a rocky start when it sold some titles -- like Wrath of the Lich King -- before their street date.
As they tend to do, iSupply has broken down the iPad and worked out just what all those magical components are. After compiling and pricing all the individual parts, iSupply has estimated that there are $259.60 in parts in each 16GB Wi-Fi only iPad. That model retails for $499 leaving Apple with a healthy 48% gross margin.
The components associated with the display accounted for the largest proportion of the price, over 40%. The flash memory was also a big contributor to cost, but the increased price of these models keeps the margins around 50%. Clearly these numbers don't include R&D costs, but Apple has a reputation for maintaining higher margins than other hardware makers, who try to make up for lower margins with more sales over time.
We may not know just how much Apple is making on each iPad, but it seems clear they aren't taking a loss. The upcoming release of that 3G edition (with an extra $130 charge) should help as well. We look forward to the iSupply teardown of that model so we can see just what sort of magical 3G chip it has.
A leak of new training materials today have indicated that Verizon Wireless will be making some changes to its plans starting January 18th. First off, Verizon is getting rid of the all-inclusive Premium Plan. Big Red is also dropping the prices of their unlimited plans by 30%. This actually places the cost for unlimited minutes below that of AT&T.
Verizon is making some changes to their data plans as well. The carrier is going to offer a new 25MB data package for $9.99 per month, but the full $29.99 data plan is still required for smartphones. The new cheaper data plan is geared toward so-called “Multimedia Phones”, which will now require customers to purchase this plan. This seems to be a category Verizon has just made up, and includes handsets like the Chocolate Touch, the enV3, Moto Entice, and Nokia Twist among others.
While we’re happy to see the big price drop in unlimited plans, the new required data plans for some feature phones is disappointing. Do you think it’s reasonable?
Have you been holding off on buying that new console for fear of the setup process? Does the thought of wasting a whole ten minutes of you time plugging everything in and turning it on make you physically ill? Well then, Target will totally have you covered later this month. Yes, for a mere $99 Target will come to your house and set up your console.
If you are rich enough to go for this, Target will plug in the console to your TV, configure it, put it on your network, and setup online accounts. Technically, it’s a third party, Zip Installation, that’s doing the work, but Target is putting their name on it.
At a hundred bucks, I imagine it will be a tough sell. Would you, or anyone you know pay for this service?
Google’s Nexus One announcement earlier this week included confirmation that future phones sold on the Google website would all be available unlocked. So, Google intends to work with various hardware partners, and sell some of the resulting phones as Google branded. Some have said this could be a dangerous road for Google to travel, as they may risk alienating their partners. Among those critics is Microsoft.
Microsoft’s Entertainment and Devices President Robbie Bach took Google to task for the move in a speech at CES. "Doing both in the way they are trying to do both is actually very, very difficult… Over time you have to decide whether your approach is with the partners or more like an Apple approach that is more about Apple. Google's is an interesting step. We'll see how people react," said Bach.
Microsoft has been struggling with Windows Mobile as of late, so you have to wonder if they should be giving Google advice in this space. It is possible that some hardware partners could be put off by Google’s move, but Android has one big advantage over Windows Mobile. Google does not charge their hardware partners a license fee to use Android. We’ll have to see if hardware companies are scared enough that Google could upstage them to pass up that deal.
Nokia’s market share in the US has been eroding continuously over the past few years. Now the phone maker has announced that their North American flagship stores will be closing in early 2010. The shops, which only opened a few years ago, are located in Chicago and New York.
Nokia says they intend to rely more on larger retail chains and carriers to sell phones. Nokia would disagree that the stores are being closed because of cost cutting. According to a Nokia statement, “The Flagship stores were originally conceived to inspire and educate consumers to the benefits of mobility through an innovative retail experience, and to broaden the appeal of the Nokia brand… consumer awareness in the U.S. has grown substantially.” So you see, it’s not that the stores were too costly, it’s that they had simply fulfilled their purpose. Right…
Many of Nokia’s handsets fail to ever make it to an American carrier. If they’re serious about their strategy to rely more on carriers, it might be a good idea to strike whatever deals they can to bring devices like the N900 to customers at a subsidized price. The world is bigger than the US, but Nokia can’t continue to ignore the bulk of US consumers that won’t ever buy an unsubsidized phone.
Sales tax aside, how cool would it be to pick up your Amazon.com order locally instead of waiting for your items to ship? According to recent rumors, that's a very real possibility, provided you reside in the U.K.
The Times Online in London says Amazon "has launched a secret search for brick-and-mortar stores to support its rapidly growing website." The online mega chain is said to be searching for high-profile locales while the Borders book chain is shuttering its doors.
"When Amazon was just selling books and CDs that fitted easily through the letterbox it was fine to be a web-only business, but now it has branched out into everything from children's bikes to electricals it believes it could boost sales by having stores that offer a collection point for shoppers. It will probably be an Argos-sytle operation," said a source familiar with Amazon's proposals.
It sounds risky to move from the web to the street, but if anyone can pull it off, it would be Amazon. During the credit crunch, Amazon defied Wall Street forecasts with a 28 percent surge in sales to $5.5 billion. The company's value has never been higher, including during the dotcom era.
Look, no one’s going to claim that Microsoft has really mastered this whole retail thing. That’s not to say they aren’t trying. The software company that recently brought you a Microsoft Store in Arizona, has now stepped it up to a small PC equipped space in Saks Fifth Avenue in New York.
While the spirit of providing free internet access is certainly appreciated, the design is a little awkward. Maybe the low chairs and high tables are by design; a way to get people to move along quickly? There is also an associated twitter stream for the promotion. You can check it out at #holidaywindows. Tweets from the tag are used to populate a screen in the Saks storefront window.
Microsoft may be a bit on the reactive side, but they were smart enough to know some sneaky internet types might try to spam the tag. Sure enough, if you check the tag online you’ll likely see some pro-Mac content. But Microsoft assures us that there are filters in place so only comments in the holiday spirit make it to the actual Saks windows display.
If the Barnes and Noble Nook sounds like a great Christmas present, you might want to preorder one now. Everyone’s favorite bookseller has announced that due to massive demand, Nook preorders have been pushed into December. There are also reports that Barnes and Noble stores will have no in-store Nooks until mid December.
According to a Barnes and Noble spokesperson, “Nook has quickly become the fastest selling product at Barnes & Noble. In fact, there is so much consumer interest in Nook, that pre-orders have exceeded our expectations." The Nook will be selling for $259 whenever you can find one. Barnes and Noble opened their eBook store back in July and it currently offers over 700,000 titles.
The Nook will be going up against Amazon’s Kindle reader. B&N is hoping to leverage their brick and mortar stores to gain an advantage over the all online Amazon. Are you considering getting an ebook reader this holiday season?