  What makes you think you can't expand, slowly, internationally? The new Fire is being rolled out in the U.K. offering a very similar ecosystem.  Their model requires getting a LOT of pieces in place. It's really damn hard. There's a reason why only Apple has been able to pull it off so far. And if they they want the meatspace sales included, they have to work out shipping on top of everything else. So far, they've only expanded into markets where they were also expanding their meatspace business. That's why I think focusing exclusively on digital when assessing Amazon is a mistake. Clearly their traditional sales model remains their core model. The Fire isn't really an iPad killer - it's a retail bankruptcy machine. It's designed to some day let you snap a photo of something you see in the park, pull it up on Amazon, read the review, click the Buy Now button, and have it the next day. No need to visit the mall. Oh, and it streams movies and stuff too.  Quote:  I strongly doubt Amazon is going to beat Apple. But they have a very good chance of being the biggest Android tablet vendor, by a long shot.  Amazon can't win the digital war. Apple can go loss leader there if need be, and Amazon doesn't control the consumer endpoint well enough. They're more integrated than they used to be, but not nearly well enough integrated to pay off. And if they're not careful, they'll piss off their dependent partners like Google did. I'm sure Amazon makes more money through their iOS originated sales than they do through sales on their own device. They can't afford to break that.  Bottom line, you need to make real money someplace. You can use that to subsidize other parts of your business, but you can't use low-margin divisions to subsidize no-margin divisions. That's basically what Amazon is doing. It's why they have a PE of 000. They're growing revenues but not profits, so I have no clue why investors keep rewarding them. There's no possibly way Amazon will ever grow profits to match that PE based on anything they're showing us now.  That's why I think focusing exclusively on digital when assessing Amazon is a mistake. Clearly their traditional sales model remains their core model. The Fire isn't really an iPad killer - it's a retail bankruptcy machine. It's designed to some day let you snap a photo of something you see in the park, pull it up on Amazon, read the review, click the Buy Now button, and have it the next day. No need to visit the mall. Oh, and it streams movies and stuff too.  