Kindle sales soar but Amazon mum on actual numbers
- 01 February, 2012 11:25
- Comments
Amazon said flooding in Thailand and economic problems in Europe weighed on its financial results for the fourth quarter but it also said it was pleased with the results, which disappointed investors.
Some observers were likely also disappointed that Amazon didn't disclose unit sales figures for its popular Kindle e-readers. It said only that during the last nine weeks of 2011, Kindle unit sales, including the Fire tablet, increased 177 percent compared to the same period in 2010.
Some analysts believe Amazon makes very little money on the sale of Kindles, hoping to make money instead on e-book sales.
That could be one reason Kindle sales didn't seem to have much impact on Amazon's profit. Its net income for the quarter dropped 58 percent to $US177 million, compared to $US416 million in the same quarter last year.
But its sales disappointed too. Net sales grew 35 per cent to $US17.43 billion, below the $US18.21 billion that analysts polled by Thomson Financial had hoped for.
On a conference call to discuss the results, Amazon CFO Tom Szkutak said the company was pleased with the results and made generally glowing comments about the quarter without offering many details. Amazon is pleased with "great growth" in Kindle sales, "strong growth" in digital media including books, video and music, and "tremendous growth" in Amazon Web Services, he said.
However, analysts on the call sounded displeased with Amazon's continued investments back into its business, which they seemed to blame for the drop in profit. Amazon has been spending a lot on its business in recent years and it's been paying off, said Gene Munster, a tech analyst at Piper Jaffrey.
"The big surprise for investors tonight is what appears to be diminishing returns on that investment," he said, asking Szkutak to comment.
Amazon's strategy of investing back in the business won't change, Szkutak said.
"We're incredibly optimistic about the opportunity we have and that's why we have invested the way we have and why we're continuing to invest in the business," he said. "We're pleased with the performance in the fourth quarter and what we have going forward."
One such investment has been in people, with headcount up 67 per cent in 2011 over the previous year. Most of those people are in operations and customer service, Szkutak said.
The company has also been investing in capacity to support both Amazon Web Services and its retail business, he said.
Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.
- Bookmark this page
- Share this article
- Got more on this story? Email CIO
- Follow CIO on twitter
-
Face Time - Interview with John Brennan and Robert DiStefano
-
How to implement next-generation storage infrastructure for Big Data
-
Pfizer's Future Depends on IT Transformation
-
Pfizer's Future Depends on IT Transformation
-
Pfizer's Future Depends on IT Transformation
-
Reducing Costs Through Better Server Utilisation
By consolidating systems onto the latest server technology and taking advantage of virtualization techniques, enterprises can optimize datacenter efficiency, gain flexibility, and reduce operating costs—without sacrificing performance or impacting service levels. Read on. -
Best Practices for Implementing a Data Warehouse on the Oracle Exadata Database Machine
Increasingly companies are recognizing the value of an enterprise data warehouse (EDW). A true EDW provides a single 360-degree view of the business and a powerful platform for a wide spectrum of business intelligence tasks ranging from predictive analysis to near real-time strategic and tactical decision support throughout the organization. Ensuring the EDW will get the desired performance and will scale out as your data grows you need to get three fundamental things correct, the hardware configuration, the physical data model and the data loading process. Read on. -
A Governance Guide for Hybrid SharePoint Migrations
Cloud-based computing represents a powerful new option for managing enterprise content, offering increased flexibility, efficiency, and reduced cost for IT infrastructure, data storage, and applications. However, for a variety of business and technical reasons, most organisations will take a phased approach to adopting cloud-based services, which will require them to continue to maintain their on-premises SharePoint environments during the transition. This white paper, written by Chris Beckett from SharePoint Bits, discusses some of the benefits and risks of hybrid SharePoint deployments, and presents governance considerations that are essential for ensuring a successful migration.
-
MYOB Software for Dummies 6E Australian Edition
-
Teach Yourself Visually Windows 7
-
Excel 2007 All-In-One Desk Reference for Dummies
-
Office 2007 for Dummies
-
Computers for Seniors for Dummies, 2nd Edition
-
Windows 7 for Dummies® Dvd+book Bundle
-
Office 2007 All-In-One Desk Reference for Dummies
-
Windows 7 for Seniors for Dummies®
-
Microsoft Office








Comments
Post new comment