The biggest online retailer, Amazon.com Inc declared that the customers have purchased about 1 million Kindle ebook readers and tablets in each of the three weeks. This is the most elaborate sales figures the company has released.
They also made a statement that the Kindle Fire Tablet, which costs less than $99, has been the best selling product on their site since its launch about 11 years ago. This Seattle-based company also said that the Kindle Fire sales have steadily increased week-over-week for the past three weeks.
This 7-inch display Kindle Fire that runs on Google Inc’s Android operating system costs less than half the value of an Apple Inc’s least expensive ipad tablet. The CEO of Amazon.com Inc, Jeff Bezos, in October had said that the company might face a loss in the last quarter of the year as it increases expenditure. The profit margin might narrow down to 0.79% this quarter compared to 3.66% during the earlier quarters this year – as told by average analyst estimate compiled by Bloomberg.
Brian Blair, an analyst at Wedge Partners Corp. in New York said – since they have not declared the numbers, it’s a big deal that for some reason, they think that they need to disclose the metrics now. Amazon shares too improved to 0.6% to $181.26 at close in New York. This year, the stock seems to be changed a bit.
Content Revenue
While IHS Inc. states that the Amazon is having monetary loss on each $199 tablet it sells, on November 15th, Susquehanna Financial Group LLLP states that each machine may generate a total of $ 384 in revenue for the company, including money spent on books, videos and other content.
Sales estimates have varied; Amazon has increased its tablet production two to three fold since its launch. Blair says that they might probably sell about 5-6 million Kindle Fires by this year end.
An analyst Barclays Plc in New York, Anthony DiClemente states that Amazon may sell about 4.5 million tablets in the last quarter of 2011, where as an analyst at Robert W. Baird & Co. in San Francisco, Colin Sebastian estimates that this company will sell up to 5-6 million Kindle Fire devices by the end of 2011.
After hitting store shelves on Nov. 14, the Kindle Fire has surpassed more established tablets from Samsung Electronics Co. and Barnes & Noble Inc. (BKS) in challenging Apple, which will ship an estimated 18.6 million iPads in the fourth quarter, IHS said. That would give Apple a market share of 66 percent, compared with an estimated 14 percent for Amazon, IHS said. The researcher predicts the overall sales of these tablets would be around 28.3 million units this quarter.
Colin Gillis, an analyst at BGC Partners LP in New York said that they are getting a grip by trading no-profit hardware. Though bad for margins, it is still giving them some share.