Will Amazon's bet on the Kindle Fire ever pay off?

When you're selling a device at cost you can't really make it up in volume

Source: Asymco

FORTUNE -- From the start, Amazon's (AMZN) plan for the Kindle family of tablets and e-readers was to sell a compelling device at or below cost that would direct customers to Amazon's online stores.

"We want to make money when people use our devices," CEO Jeff Bezos often says, in a remark widely seen as directed at Apple (AAPL), "not when they buy our devices."

So how has that worked out for Bezos?

Not terribly well, judging from early results this holiday season. According to IBM's (IBM) Benchmark survey of Thanksgiving and Black Friday sales, Kindles accounted for only 2.4% of purchases made via tablet, fewer than those made by Barnes and Noble's (BKS) Nook (3.1%) and way fewer than the iPad (88.3%).

That jibes with a new e-commerce report published by Monetate that tracked sales at 100 retailers (but not at Amazon.com) made via tablet  over the past four quarters. Third quarter sales on the Kindle Fire (2.06%) were actually lower than Q2 (2.18%), as shown in the graph above created Tuesday from Monetate data by Asymco's Horace Dediu. Kindle just doesn't not seem to be a popular platform for making online purchases.

On Cyber Monday, Amazon was selling last year's Kindle Fire for $129, about $72 below cost as estimated at launch time by IHS. Economies of scale have no doubt brought those costs down since 2011, but the company is not making a lot of money on the device.

The  new Kindle Fire HD, which retails for anywhere from $199 to $499 (with a $50/mos. LTE data plan) was not marked down. That's probably just as well.

Posted in: Amazon, Apple, Black Friday, Cyber Monday, iPad, Kindle, Kindle Fire

• Why is shopping via iPad and iPhone outpacing Android?

  A deeper look at the surge in Black Friday shopping by smartphone and tablet

  FORTUNE -- One of the paradoxes of IBM's Thanksgiving and Black Friday shopping report was that Apple (AAPL) mobile devices -- especially the iPad -- led the surge in online shopping, and not the Android devices that have been steadily gaining market share.

  Over the weekend, Asymco's Horace Dediu took a closer look at IBM's data, which he's been tracking MORE

  Philip Elmer-DeWitt - Nov 26, 2012 8:01 AM ET
  Posted in: Android, Apple, Black Friday, iPad, iPhone, Tablets, Thanksgiving

• Apple's iPad led Thanksgiving and Black Friday online buying

  10% of online purchases -- and 88% of tablet purchases -- were made on an iPad

  FORTUNE -- Apple (AAPL) devices loomed larger than expected in IBM's (IBM) final report on this year's surge of online buying Thanksgiving Day and Black Friday.

  Online sales were up both days -- 17.4% and 20.7%, respectively -- from 2011.  But the biggest surge came from mobile devices -- and in particular from purchases made on MORE

  Philip Elmer-DeWitt - Nov 25, 2012 8:46 AM ET
  Posted in: Android, Apple, Black Friday, iPad, iPhone, Thanksgiving

• Video: Black Friday at the Apple and Microsoft stores

  Have we grown weary yet of comparing the two companies' retail efforts?

  FORTUNE -- Colorado-based MacWeekend.com took a videocamera to Lone Tree's Park Meadow Mall, one of a growing number of high-end "retail resorts" that house both Apple (AAPL) and Microsoft (MSFT) retail outlets. The comparison is a bit unfair, as the Apple Store is considerably smaller and therefore feels busier.

  "Left: worship," writes Herb Herbert in the YouTube comment field. "Right: MORE

  Philip Elmer-DeWitt - Nov 24, 2012 9:38 AM ET
  Posted in: Apple, Black Friday, Microsoft, Retail, Stores

• Analyst: 'This holiday season belongs to Apple'

  With refreshes across 80% of its product line, Apple devices are hot Black Friday sellers

  FORTUNE -- There was a lot of chatter about Apple (AAPL) in the sales reports for Black Friday 2012.

  Topeka Capital's Brian White ran down the 7% to 31% discounts in Apple's Black Friday "Come and Give It" sale -- the only day of the year Apple offers deals on any of its products. "We believe this MORE

  Philip Elmer-DeWitt - Nov 23, 2012 10:21 AM ET
  Posted in: Apple, Black Friday, Deals, Discounts, Sales

• Black Friday: Apple zigged while the PC market zagged

  PC sales were down 8% Thanksgiving week, but demand for the MacBook Air was strong

  In a note to clients Thursday, Morgan Stanley's Katy Huberty rattled off several reasons to explain why retail sales of personal computers in the U.S. were down 8% year over year for the week of Nov. 20 to 26, as reported by the NPD Group.

  Hard drive shortages, the lingering effects of flooding in Thailand
  Price reductions in MORE

  Philip Elmer-DeWitt - Dec 9, 2011 6:16 AM ET
  Posted in: Amazon, Apple, Black Friday, iPad, Katy Huberty, Kindle Fire, MacBook Air, Morgan Stanley, NPD Group, PCs, Retailing, Thanksgiving

• Chart of the day: iPad, iPhone dominate "couch commerce"

  As a companion piece to the comScore report Monday that Americans have spent a record $18.7 billion online so far this holiday season -- up 15% from last year -- consider this chart from Compuware APM showing the relative contributions of the two leading platforms for what it calls "couch commerce": Apple's (AAPL) iPad and iPhone.

  Together, according to an earlier IBM study, the two devices accounted for 10.2% of Black Friday's online MORE

  Philip Elmer-DeWitt - Dec 5, 2011 11:10 AM ET
  Posted in: Apple, Black Friday, Compuware, comScore, Couch Commerce, iPad, iPhone, Mobile, Online, Tablets

• Black Friday head count: 14.8 iPads per hour, up 68% y-to-y

  Macs walked out of Apple Stores at the rate of 10.1 per hour, up 23% from 2010

  Piper Jaffray's Gene Munster spent the day after Thanksgiving as he has every year since 2008: standing in an Apple (AAPL) retail store counting sales. The results are summarized in the chart at right (typo his).

  His observations:

  In eight hours, he (or his team) watched iPads and Macs walk out the door at the rate MORE

  Philip Elmer-DeWitt - Nov 28, 2011 5:30 AM ET
  Posted in: Apple, Black Friday, Gene Munster, iPad, Mac, PCs, Piper Jaffray, Tablets

• IBM report: iPhones and iPads accounted for 10.2% of Black Friday online retail traffic

  Online sales were up 24.3% overall. iPad shoppers were most efficient. Android less so.

  Apple (AAPL) devices figured prominently in an IBM (IBM) Smarter Commerce survey issued Saturday that reported double digit increases in online sales Thanksgiving Day (up 39.3% from 2010) and Black Friday (up 24.3%) and a 200% increase in purchases made on mobile devices (from 3.2% in 2010 to 9.8% this year).

  In particular: (I quote)

  The Apple Shopper: Mobile shopping MORE

  Philip Elmer-DeWitt - Nov 27, 2011 6:04 AM ET
  Posted in: Android, Apple, Black Friday, Google, IBM, iPad, iPhone, online shopping, Thanksgiving

• Apple's Black Friday savings by the numbers: 7% to 16%

  Biggest savings on Macs. Best deals on accessories. But beware the malware.

  Apple (AAPL) posted its Black Friday sale prices at 12:01 a.m. Pacific Time Friday and they were exactly as rumored.

  The savings on Apple-branded products range from a high of 15.94% on $69 accessories like the Magic Trackpad to 7.02% -- less than the sales tax in 25 states -- on the $299 Time Capsule 2TB.

  A guide to the best deals:

  WARNING: MORE

  Philip Elmer-DeWitt - Nov 25, 2011 6:30 AM ET
  Posted in: Apple, Black Friday, iMac, iPad, iPod touch, iTunes, MacBook, Magic Trackpad, malware, Microsoft, Time Capsule, Trojan, Windows, Worm