Amazon’s decision to sell its new tablet at a loss is an indication that proprietary content is where future competition will be, according to technology fund managers at GLG Partners.

Selling its Kindle Fire at a cut-cost of $199 will perturb the technology sector and force companies to reconsider business strategies, said Anthony Burton and Philip Pearson, co-managers of the GLG Technology Equity Fund.

As a result of the price cut, there will also be a shift in the battle from property rights to the acquisition and distribution of high-value proprietary content, they said.

“Amazon is forecast to sell six million Fire tablets in Q4 and it will make a loss on every single one of them – its initial margin is negative,” Burton said in a statement.

“It can do this because it has alternative revenue streams – it can sell you prime and other digital content. Amazon is prepared to sacrifice short-term earnings in the belief it will recoup its lost operating margin, and ultimately make more money by boosting its total future addressable market via quality content,” he said.

While this type of business model is destructive to the technology ecosystem, businesses already in possession of high-quality content will, however, benefit from this structural shift.

“Short-term earnings multiples have been blown out of the water. Investors have to realize that there has been a terminal value shift, and that means you have to look four or five years out, not at a company’s one-year forward price-earnings ratio, which is what Wall Street likes to do," said Pearson.

According to Burton and Pearson, reports suggest that the UK price of the tablet in January will also be at a loss-making £100 ($159).