Amazon's fourth quarter results missed targets, despite strong sales of the Kindle Fire. It is these users that will begin to pad the company's earnings, however, validating Amazon's strategy of selling Fire at a very low margin and then making up the profit through entertainment content sales.
Amazon saw its profits plummet, reporting net income of $177 million in the fourth quarter of 2011. This was down sharply from a year earlier, when the retailer reported income of $416 million. Revenue was up 35 percent however, to $17.4 billion.
That's a dramatic change from just a few months ago and, perhaps not coincidentally, before new Nooks and Kindles lowered price of entry for both categories. Between December and January, the number of Americans owning one of the devices rose to 29 percent from 18 percent. During the same time period, the number owning a tablet rose to 19 percent from 10 percent, which is the same rise for e-book readers.
Pew Internet released the data earlier today, based on surveys conducted in mid December and early January. "These findings are striking because they come after a period from mid-2011 into the autumn in which there was not much change in the ownership of tablets and e-book readers", according to the report. "However, as the holiday gift-giving season approached, the marketplace for both devices dramatically shifted". As recently as August 9 percent of Americans owned e-book readers and 10 percent tablets.
Sony Electronics rang in 2012 with a surprising discount that may foreshadow much about the tablet market this year. Overnight I received email from a Sony spokeswoman saying the company "has permanently dropped the price of the Sony Tablet S by $100 starting today". This follows what seemed like a temporary $50 discount right before Christmas. If you paid $499.99 or $599.99 before Santa's sleigh ride, 16GB Sony S is now $399.99 and 32GB 499.99.
SonyStyle Store doesn't yet list the new pricing as permanent, merely "save $100 instantly". "On top of these savings, Sony is also currently offering (for a limited time) a store credit and five free Video Unlimited movie rentals, five free PlayStation Store game downloads and 180 days of free Music Unlimited service with the purchase of a Tablet", the spokeswoman says.
Leading online retailer Amazon.com has never been forthcoming with exact sales figures for its Kindle e-reader platform. Instead, the company uses ambiguities like "the current generation Kindle is selling twice as many units as the previous generation," or that the current generation is the fastest-selling model yet.
For the first time, Amazon has given a more concrete idea about how many Kindles are selling. In a roundup of its 2011 holiday season sales, the company said it was selling "well over" one million Kindle devices per week in the month of December, and that the best-selling, most gifted, and most wish-listed product across all of Amazon's product listings is the low-cost Kindle Fire tablet.
If you ever wondered what tablet comedian Conan O'Brien uses, perhaps this video about Amazon Kindle Fire will tell you. One commenter to the comedic segment asked: "I wonder how much Apple paid TBS for this one?" I wouldn't go that far.
You will laugh. Surely iPad fans will chuckle most.
Media tablet shipments missed IDC's third-quarter shipment projections. Meanwhile iPad lost market share; IDC forecasts greater declines for Q4. The culprit: Amazon Kindle Fire (with a little help from Barnes & Noble Nook). In the battle of price, and vertically-integrated content platforms, Amazon is ready to take a bite out of Apple. That brings me to the question of the day: Did you or do you plan to buy Kindle Fire, or even Nook, when previously considering iPad 2 this holiday? Please answer in comments as well as taking our buying poll.
Kindle Fire's big advantage is price -- $300 less than the cheapest iPad 2, at $199. Amazon and Apple compete head-to-head in ebooks, music and movies and curated applications stores. Both command hugely popular brands. Kindle Fire is smaller and doesn't pack a camera, but less also means lower price -- and single one at that. iPads range from $499 to $829.
A number of Kindle Fire users are reporting Internet connectivity issues that are preventing them from browsing the web, according to posts to Amazon's community forums. Devices connect to WiFi but not to the Internet, or speed drops dramatically.
The trouble was widely reported today and attributed to WiFi. However, based on a cursory technical review and thorough exploration of forum posts, BetaNews sees a likely different cause: Some kind of breakdown between Amazon's Silk browser, Amazon's supporting web services and local ISP connection -- relating to server caching, we suspect.
So says IHS iSuppli, which released projections for fourth-quarter tablet shipments on Friday. The firm predicts Kindle Fire will take about 13.8 percent of the market after having no share in the previous quarter. Kindle Fire went on sale at the end of September, with Amazon taking preorders right away but shipping November 14.
iSuppli expects Amazon to ship about 3.9 million units during the quarter, taking second place and all but tripling Samsung tablet market share. Kindle Fire's success comes at the expense of Apple as well as Samsung, however.
Amazon is leaning on its strengths in procurement in order to make the Kindle Fire as cheaply as possible, IHS iSuppli says. The firm has begun its teardown of the device and says that the components inside offer little surprises from the virtual teardown it released in September. Each Fire costs Amazon $201.70 to build, meaning the company loses $2.70 on each device.
Previously, IHS guessed that the Fire had cost $209.63 to build, but that was based on what it new of Amazon's suppliers and not an actual teardown of the device.
On September 30, I asked: "Will you buy Kindle Fire?" Based on responses to our survey, your comments and a study showing some people putting off iPad 2 purchases for Kindle Fire, the question could have been: "Why won't you buy Kindle Fire?" Many people plan to, and Amazon will make it easy. Unlike the original Kindle's debut, exclusively through Amazon, Fire sells in stores like Best Buy. Actually, Amazon plans broad retail availability, giving Kindle Fire the kind of distribution needed to take on other Android tablets and, of course, iPad 2.
Among the 1,156 BetaNews survey respondents, 31.66 percent already preordered Kindle Fire -- another 23.26 percent plan to purchase within 3 months. I'll skip to the punchline: Only 28.89 percent of respondents "have no plans" to buy Amazon's Android tablet. I've embedded the survey below for some fresh responses and expect the numbers to go up. The responders aren't qualified, meaning we don't know who they are but assume many are techies like you.
Amazon's Kindle Fire is just starting to ship today, but it already is the most popular Android tablet among developers. IDC and Appcelerator say the Fire edges out the Samsung Galaxy Tab, and interest in the device is similar to that seen before the launch of Apple's iPad in April 2010.
IDC's study confirms BlackBerry's continuing fall from grace, as Windows Phone moved into the third spot among most popular mobile operating systems for development. Nokia's new lineup of Windows-powered phones are the reason, as developers expect market share for the platform to rise as a result. Half of those who expressed interest in Windows Phone cited the Microsoft/Nokia partnership as the reason.
It looks like this will be a very good holiday season for tablet computers with only 31 percent of respondents to our newest Plus Study saying they are not interested in a tablet. Out of the remaining 69 percent who are interested in buying a tablet or possibly learning more about them, 44 percent of them would be willing to consider a smaller, 7-inch Amazon Kindle Fire. At the same time only 12 percent say they wouldn’t even consider anything other than an iPad.
With this much "acceptance" of a smaller tablet and the large price difference, conditions seem right for the Amazon Fire to become a hot item this year. Although the study didn’t ask specifically about the Barnes and Noble Nook, the recently announced, $249 Nook tablet could also be an attractive alternative to iPad.
Book retailer Barnes and Noble on Monday unveiled the third generation of its Android-powered Nook e-reader, the Nook Tablet. Nearly identical in appearance to its predecessor the Nook Color, the Nook Tablet is designed for improved multimedia consumption to better compete with Amazon's new Android tablet, the Kindle Fire.
The Nook Tablet has a 7-inch IPS touchscreen display, a 1GHz dual-core processor (currently of undetermined brand,) 1GB of RAM, and runs Android 2.3 (Gingerbread.)
Is Amazon Prime the best deal in tech? It just may be: Amazon now offers the capability for customers to loan out over 5,000 books for their Kindle or Kindle Fire devices. The Kindle Owners' Lending Library will allow for one book per month to be lent out, and there are no due dates.
To borrow a new book, the Kindle user "returns" the title on their device by lending out a new book: the older book will disappear.
Leading online retailer Amazon submitted its third quarter 2011 sales and earnings figures on Tuesday, revealing a big jump in sales -- especially in its Kindle product line -- but an overall decline in income.
Sales increased 44 percent sequentially, going from $7.56 billion to $10.88 billion; this represented a 39 percent increase over the same quarter last year.