Kindle and eBooks Amazon’s Saving Grace
While the Amazon (NASDAQ: AMZN) Kindle is the company’s best-selling item in its 16 year history, and eBooks for the device out-sold paperbacks this holiday season, the company still missed Wall Street’s profit projections for the holiday season, causing share prices to dip this week.
The company also cracked the milestone of $10 million US dollars in profit in one quarter, but the results might have been better if Amazon hadn’t needed to slash prices in order to match those at competitor Walmart. They also offered free shipping during the holiday season to many destinations. Higher costs may have also hurt Amazon’s profit margin as it invested heavily in cloud computing and building its shipping infrastructure, as they now deliver to 178 countries.
Analysts had high expectations for the retailer, whose stock had increased 75% from an all-time low in July. The expectations may also have been due to the fact that many other technology companies such as NetFlix and Google experienced high growth last year.
Amazon has not revealed how many Kindle devices it has sold, saying only that the number is in the “millions.” Being on top of the shift in how consumers buy and digest information, which has caused major challenges for the publishing industry in particular, may be one of the reasons Amazon has managed to continue to be successful.
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