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Amazon triples Kindle sales at cost of 58% profit drop

updated 04:55 pm EST, Tue January 31, 2012

Amazon Q4 defined by Kindle Fire losses

Amazon posted results Tuesday that outlined the costs of pushing the Kindle Fire. The online shop's Kindle device sales almost tripled, at about 177 percent over the past year. Its net profit dropped 58 percent to $177 million, however, underscoring how it had sold the Fire at a loss to get device share.

The profit slash came in spite of a 35 percent sales hike to just over $17.4 billion.

As it has in the past, Amazon has so far refused to report its actual Kindle shipments or to break down the ratio of the Kindle Fire to its e-paper readers. The official statements make it difficult to verify unofficial estimates which have had as many as six million Kindle Fires shipping this fall. Most estimates have it at less, since Amazon was selling a maximum of a million Kindle devices of any kind a week during December, making it doubtful that the Fire could have shifted that many from its mid-November launch onwards.

The Fire has been the bestseller on Amazon since launch, but it's not known what this means without context. Amazon has always argued that it doesn't publish numbers to maintain a competitive secret. Critics have pointed to Apple being very public with its figures and have suggested that Amazon avoids device numbers to mask any disappointments.

Whether or not predictions are accurate, rumors and outlooks have Amazon cutting production by large numbers without the momentum of a holiday to drive units. Apple has often seen only mild slumps or even increases in numbers of its devices in recent years.



By Electronista Staff
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Comments

  1. RoboBobo

    Fresh-Faced Recruit

    Joined: Nov 2011

    +3

    Ashame they don't report

    Publishers do know what their own book sales are and from what channel they make those sales - and for that reason its obvious beyond any doubt that as an e-book platform, Amazon is tops.

    Don't kid yourself about that.

    Still, it'd be nice to have exact numbers.

    Seems like Amazon is doing about as good as to be expected - I doubt they wanted to kill all profits, at the same time, they do want to make a big a splash as they can - they have to be future looking - this is a come from behind story, they haven't been - essentially a post-pc tablet maker for a long time.

    The Kindle Fire is relatively good - although I sure wish Apple would come up with a 7" tablet - Apple's version would be so much better than the Fire - in my mind, I imagine it as being super thin and light, and of course, coming with iOS - that'd be the killer "portable" tablet. You can argue an iPhone is a killer portable tablet, but at 3.5" its a bit small for a tablet.

  1. BlueGonzo

    Fresh-Faced Recruit

    Joined: Dec 2010

    +1

    happend as expected

    We will see how patient the shareholders are.

  1. sibeale1

    Fresh-Faced Recruit

    Joined: Feb 2006

    +4

    Old saying:

    They lose money on every sale, but they make it up on volume.

  1. global.philosopher

    Fresh-Faced Recruit

    Joined: Sep 2010

    +4

    A drop of sales of the Fire in the new year...

    This must be a blessing to the company to remain profitable. Analysts say the Fire will pay itself off over the life of the Fire but they never state what the life of the Fire is. If they cannot sell any more past March and people stop using it or upgrade thereabouts to a new device beit a new Fire or an iPad3, etc then how exactly is it suppose to pay itself off. After all to pay itself off means people actually have to use it and with so many people using them as stocking stuffers many will not even get used beyond a few freemium games.
    Imagine if you had plans to buy an iPad2 in the new year or an iPad3 when it is released and someone hobbled you with the Kindle Fire as a cheap present....you most likely will still upgrade to aniPad leaving the Fire destined to be placed on abookshelf or in a drawere somewhere.

  1. chas_m

    Moderator

    Joined: Aug 2001

    +5

    seven-inch from Apple

    Not going to happen.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    Horrible analysis

    This is the great MacNN analysis. "Amazon increased sales of Kindle Fires. Profit goes down. Therefore it must be related to how much they're losing on the Fire. " It couldn't be due to any other factors, like added capital costs, purchases of other companies, R&D. Nope, has to be the kindle fire.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    Oh

    And the article states apple is very public with their device numbers. Sorry, they aren't. They're very public with their good selling device numbers. But the stuff that doesn't sell, that gets combined into other pies. Like AppleTVs or MacPros or iMacs.

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