Will Amazon’s bet on the Kindle Fire ever pay off? by Philip Elmer-DeWitt @FortuneMagazine November 27, 2012, 1:54 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons 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.