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Amazon's new Kindle: Not itself a money maker

Althea Chang, Producer
Wednesday, 25 Sep 2013 | 6:08 PM ET
Amazon's New Kindle: Not Itself a Money Maker
Wednesday, 25 Sep 2013 | 12:00 PM ET
Why Jeff Bezos thinks it's worth it to sell new Kindle Fire tablets at relatively low prices. With CNBC's Jon Fortt and Gene Munster, Piper Jaffray senior tech analyst.

Amazon's new Kindle Fire tablets themselves aren't expected to make the online retailer and device maker a ton of money. Instead, the content and services users pay for on the devices should help the company rake in more cash.

The new Kindles, revealed Wednesday, will cost $229 for a 7-inch screen and $379 for a 8.9-inch screen. Meanwhile Apple's iPad mini prices start at $329 and the full-sized iPad costs $499 or more.

"We have been very clear, we sell these devices at break even. We don't make money when people buy these devices," Amazon CEO Jeff Bezos told CNBC. "We want to make money when people use our devices by buying Kindle e-books, buying movies and TV shows and music and so on," Bezos explained.

"I think it gets harder and harder for people like Apple to be successful on the low- to mid-end of the market because Amazon just doesn't care about profitability," said Gene Munster, senior research analyst at Piper Jaffray.

—By CNBC's Althea Chang.

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.