Treblaine said:
No. They make a profit on the hardware the exact same way they make profits on this long exhaustive list of consumer electronics that are sold without being loss-leaders:
-Smartphones
-Tablets
-MP3 players
-Desktop PCs
-Laptops
-Giant HDTVs
-DVD and blu-ray players
-TV record boxes
Almost EVERY CONSUMER ELECTRONIC DEVICE is NOT sold as a loss leader but for a profit and people buy them at that price, and takes components of standardised compatibility.
Video game consoles are the one exception.
You have no idea what you're even talking about. Smartphones are mostly sold at a loss. The reason you can pickup the latest IPhone for less than 200 is because the company selling it is subsidizing the cost with your network contract.
DVRs ALL sold at a loss with a few minor exceptions. TiVos are subsidized with your monthly subscription, and that 99$ to free ones you get with Cable and Sat are subsidized with your TV subscriptions because they know that DVR owners are less likely to leave. Even just hucking up a customer to Direct TV with basic service gives them a Minimum 150$ loss. It takes a year and a half before they see any profit from that customer.
Heck even things like DSL are subsidized with your Phone service. Which is why they have to jack up the price if you get Stand Alone DSL.
AMD CPUs are frequently sold at a loss. There has only been a few years they've been able to sell at at profit because their power usage was better than intel, and that's what people wanted in their servers.
A significant portion of Consumer Electronics are sold at a loss.
You sell at a loss to establish your market share.
You're ether going to take advantage of Economies of Scale in hopes that Future production costs drop enough to make it profitable in the long term, you can bundle it so that the sum of all the products is greater than the loss, or you can go with the Razor and Blade Model and bank on selling enough Blades to make up for practically giving away the Razors.
No one wants to Spend 500$ on something like smart phone, DVR, or even a Game System.
No One wants to write software for something with no market share ether.
Your logic for your Utopia is completely devoid of Economic Reality.