Amazon weighed ‘difficult trade-offs’ as memory costs squeezed its devices business, internal document shows
Source: Business Insider ·
Amazon forecast a $612 million gross loss for its own devices as rising memory costs squeeze hardware margins, internal document shows.
From the source
Panos Panay, head of Amazon's Devices and Services teamCHARLY TRIBALLEAU/AFP via Getty ImagesAmazon launched a series of new devices this month, including Alexa tablets and Bee AI wearables.Rising memory costs forced "difficult trade-offs" on Amazon's device prices, sales, and profit.Amazon is seeking more Alexa revenue from enterprise sales, licensing, and ads.Amazon launched a flurry of new consumer devices this month. Behind the scenes, rising memory costs are adding pressure to its already money-losing hardware business.An internal planning document obtained by Business Insider shows Amazon forecasting a $612 million gross loss this year for its first-party devices business, compared with a leadership target of a $438 million loss.The document said rising memory costs were "putting pressure" on the business's profitability, forcing "difficult trade-offs" among sales volumes, average selling prices, and gross profit.The projected $612 million loss was at the gross profit level,…