Kindle Helps Amazon To Record Q3 Results
Monday, 02 November 2009 22:36 | 
Written by Andrew King |
Last week Amazon reported excellent third quarter figures. Net income was $ 199 million - 70% up compared to the third quarter of 2008. Both revenues and profits exceeded analyst's predictions and a very strong fourth quarter is now on the cards. Share price rose by 27% amid strong expectation that Amazon would become the dominant online retail business in the post-recession economy.
Last week Amazon reported excellent third quarter figures. Net income was $ 199 million - 70% up compared to the third quarter of 2008. Both revenues and profits exceeded analyst's predictions and a very strong fourth quarter is now on the cards. Share price rose by 27% amid strong expectation that Amazon would become the dominant online retail business in the post-recession economy.
The Amazon Kindle e-book reader has been a major element of Amazon's success. Originally launched in 2007, and now in its second generation, the Kindle enjoys a 60% share of the US e-book market. Amazon has now, after a long wait, started shipping the Kindle 2 reader internationally to over 100 different countries. The Kindle DX is scheduled to start international shipping in early 2010.
The announcement of international shipping was accompanied by a second price reduction. A third reduction to $259 followed less than two weeks later - and this was considered by many to be a reaction to the announcement of the "Nook" e-book reader by Barnes and Noble. Whatever the reasons, a focus on the huge worldwide market makes a lot of sense and can only further boost Amazon's sales.
Sony, Microsoft and Apple are all in various stages of development with their new readers. Although the e-book market is relatively new it is changing and growing at incredible speed. Considering the dominance of Amazon to date, and the fact that the Kindle is their top selling product, it seems improbable that Amazon will sit on its hands as other manufacturers overtake them (just as Amazon did to Sony two years ago).
In any event, Amazon have plenty of other tricks up their corporate sleeve. They have seen strong growth in Amazon Prime mebership - which offers enhanced delivery options for an annual payment. This growth was especially strong in international areas.
An Amazon spokesman advised that analysts could expect to see Amazon expand the range of products on offer - probably accompanied by geographical expansion with time.
Sales between $ 8.13 billion and $ 9.13 billion are now being forecast for Q4.
Last week Amazon reported excellent third quarter figures. Net income was $ 199 million - 70% up compared to the third quarter of 2008. Both revenues and profits exceeded analyst's predictions and a very strong fourth quarter is now on the cards. Share price rose by 27% amid strong expectation that Amazon would become the dominant online retail business in the post-recession economy.
The Amazon Kindle e-book reader has been a major element of Amazon's success. Originally launched in 2007, and now in its second generation, the Kindle enjoys a 60% share of the US e-book market. Amazon has now, after a long wait, started shipping the Kindle 2 reader internationally to over 100 different countries. The Kindle DX is scheduled to start international shipping in early 2010.
The announcement of international shipping was accompanied by a second price reduction. A third reduction to $259 followed less than two weeks later - and this was considered by many to be a reaction to the announcement of the "Nook" e-book reader by Barnes and Noble. Whatever the reasons, a focus on the huge worldwide market makes a lot of sense and can only further boost Amazon's sales.
Sony, Microsoft and Apple are all in various stages of development with their new readers. Although the e-book market is relatively new it is changing and growing at incredible speed. Considering the dominance of Amazon to date, and the fact that the Kindle is their top selling product, it seems improbable that Amazon will sit on its hands as other manufacturers overtake them (just as Amazon did to Sony two years ago).
In any event, Amazon have plenty of other tricks up their corporate sleeve. They have seen strong growth in Amazon Prime mebership - which offers enhanced delivery options for an annual payment. This growth was especially strong in international areas.
An Amazon spokesman advised that analysts could expect to see Amazon expand the range of products on offer - probably accompanied by geographical expansion with time.
Sales between $ 8.13 billion and $ 9.13 billion are now being forecast for Q4.