Mikey Campbell
In its fourth quarter 2011 earnings call on Tuesday, Amazon posted middling gains with $177 million in net income on steady EGM (Electronics and General Merchandise) sales and a $4.5 billion growth in overall revenue.
Net sales were up from the year ago quarter, which represents a $4.5 billion bump, however overall expenses offset the gain with a $4.7 billion rise.
The Kindle Fire maker did not disclose how many e-reader and tablet units it sold during the last quarter, though it did note that the Kindle line of products was up 177 percent from the same period a year ago. Today's results are in line with Amazon's December press release that claimed the company's new Kindle Fire tablet had sold "millions of units."
Amazon is not primarily a hardware manufacturer, and is selling its Kindle product line to move content through its ubiquitous online store.
According to analyst estimates, the company is losing anywhere from $5 to $10 on each Fire it sells, though Business Insider sees this as a part of the plan.
While the online retail monolith hasn't come close to matching Apple's success with the iPad, at least one analyst notes that Amazon is dominating the low-end tablet market with an estimated 6 million Kindle Fire sales.
“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,†said Amazon CEO Jeff Bezos in a press release. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.â€
In contrast, Apple sold 15.4 million iPads during the quarter ending in December, and raked in $13 billion in its best quarterly performance to date.
Malcolm Owen
Oliver Haslam
Andrew O'Hara
Wesley Hilliard
William Gallagher
Christine McKee
131 Comments
Some of us predicted this (and take no joy in it).
This is just getting started. They'll probably have to pull or scale back Fire at some point.
Or they'll have to start charging more for them, taking away the only "real" advantage they have over the iPad. My guess is that they are not going to see the revenue stream from Fire users that they've built this model on. It's just not a sustainable model, unless they can get enough book sales and proprietary app sales to cover the cost - and I'd hate to be an Amazon accountant trying to determine how and where they're accounting for any recoup in cost.
Amazon is down 8.25% so far after hours.
Their quarter was better than expected... not sure why the negative AI slant. They actually made a profit for the quarter!
That said... I am not buying until it is in the 160's. Don't see how their business plan is sustainable with the Kindle Fire, and it seems like they are putting more emphasis on it.
See Amazon?
Selling many pieces of cheap junk = windows pc's/samsung phones/pretty much all android devices in general such as your Kindle Fizzle... fo' shizzle.
The cherry on top is missing Wall Street estimates.