People from Amazon, the company that prints smiles on their product boxes, seems they did not have many reasons to smile and that is that in the report published recently, Amazon has announced losses for the first time in nine years. Although revenue increased 27%, Amazon lost $ 274 million in the third quarter, with net sales of 13.8 billion dollars, up from 10.9 billion in the same quarter last year.
In the same quarter last year, Amazon reported net earnings of $ 63 million. Operational costs increased from 10.8 billion dollars to 13.8 billion. Amazon attributed the loss to its investment in LivingSocial.
Amazon announces losses for the first time in nine years and cites iPad Mini in press release
It is also understandable that the low margin and high volume of Amazon products affect earnings. The company also is vulnerable to money exchange rates, the growth of other online retail stores and fluctuations in consumer spending. During the presentation of results, Amazon had to use any of their products compare with the new Apple iPad Mini ...
Some time ago, Jeff Bezos (CEO of Amazon) reported that Kindle devices (products created by Amazon) are sold at cost, with the hope that Amazon derives profits from the sale of applications and content.
Surprisingly, in the press release of the earnings, appears a direct comparison between online Kindle and iPad Mini Apple. This is what they say:
Compared to the iPad Mini, the Kindle Fire HD 8.9 features:
- 193% more pixels (2,304,000 pixels, compared to 786432 pixels).
- 56% more pixels per inch (254 against 163).
- Play movies in HD (the iPad is a device Mini SD).
- Best audio thanks to dual stereo speakers and Dolby Digital Plus.
- Dual Band WiFi, two MIMO antennas +.
- It costs $ 30 less.
Compared to the iPad Mini, the Kindle Fire 7 Inch HD features:
- 30% more pixels (1,024,000 versus 786,432).
- 33% more pixels per inch (216 versus 163).
- Play movies in HD (the iPad is a device Mini SD).
- Best audio thanks to dual stereo speakers and Dolby Digital Plus.
- Dual Band WiFi, two MIMO antennas +.
- It costs $ 130 less.
It is certainly an interesting approach to a results report. In addition, the statement also explains the logic Bezos on sale at cost:
"Our approach is to work hard to charge less. Sell devices near breakeven and getting sold much sophisticated hardware at a very low ".
He says the approach is working because the Kindle Fire HD for $ 199 is the number 1 selling product worldwide through Amazon, both in terms of revenue and units sold.
"The next two best sellers around the world are our Paperwhite Kindle and Kindle. We are selling more of each of these device fourth bestselling product across Amazon. And we have not begun to give our best tablet, the Kindle Fire 8.9 inch HD will arrive on November 20. "
No doubt, Amazon is facing major challenges: it has to compete against Google's Nexus 7, a tablet quite well positioned to give a tough battle in the Amazon market $ 199.
Moreover, Google is expected to present on October 29 a Nexus with a 10-inch screen. That device will obviously have to fight both the iPad and the Kindle Fire HD.
Besides that, it is hoped that other equipment manufacturers flooded the market with dozens of tablets with Windows 8.
No doubt we will have a Christmas party with very large sales regarding tablets.
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