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Amazon's Profit Plunges 73%
41–50 of 111 posts
Re: Amazon's Profit Plunges 73%
#42Earlier quoted context omitted.
Crazy moves like "heavy spending on warehouses, data centers and digital-content offerings" An online store buying stock and building infrastructure !!!!! Crazy , they should be borrowing money and paying themselves bonuses before going bust - that's what Wall St wants
How about the $50 Amazon is losing per Kindle Fire sold?
A tried and true strategy. That has worked for (in no particular order) : ATM's, Printers, Razors, Mobile Phones, Gaming Platforms and probably even cars in some cases.
If Sony had cottoned onto this strategy, Beta would have been the worldwide video standard and they would have been paid back massively in royalties.
Shifting hardware at a loss to lock in consumers is the oldest trick in the book. Nowhere is it more important than when introducing a new technology and a new way of working. I can see that in 10 years time a Kindle will be almost free.
Re: Amazon's Profit Plunges 73%
#43> Amazon also said it ended the third quarter with 51,300 employees, up from 31,200 in the same quarter last year.
Amazon creates 20,000 jobs, and Wall Street responds with a 12% drop in stock price.
Re: Amazon's Profit Plunges 73%
#44Earlier quoted context omitted.
How about the $50 Amazon is losing per Kindle Fire sold?
A tried and true strategy. That has worked for (in no particular order) : ATM's, Printers, Razors, Mobile Phones, Gaming Platforms and probably even cars in some cases. If Sony had cottoned onto this strategy, Beta would have been the worldwide video standard and they would have been paid back massively in royalties. Shifting hardware at a loss to lock in consumers is the oldest trick in the book. Nowhere is it more…
My understanding is Apple doesn't make all that much money off the iTunes Store using a similar model. Does it really work for digital media? (besides console games)
Re: Amazon's Profit Plunges 73%
#45God, investors are idiotic. Amazon spends money to upgrade its infrastructure, stock price plunges 12 percent . Rational!
In all fairness, they did miss on revenue as well (albeit not by much). Given how highly valued Amazon is (something like 5x Walmart on a price/revs basis), exceeding estimates is expected. That's not to say they aren't an amazing company, but their valuation is extremely high.
Re: Amazon's Profit Plunges 73%
#46Earlier quoted context omitted.
How about the $50 Amazon is losing per Kindle Fire sold?
Has that been confirmed? I've heard anywhere from $5 to $50, and its always been from analysists trying to estimate the cost from parts. As far as I know, the only people who really know how much the Kindle costs to make are Amazon.
This piece gives a run down of all the analysts claims, with some calculating a $50 profit instead but as you can imagine none of it is substantiated.
http://news.cnet.com/8301-1023_3-20114722-93/amazon-kindle-f...
Re: Amazon's Profit Plunges 73%
#47Earlier quoted context omitted.
A tried and true strategy. That has worked for (in no particular order) : ATM's, Printers, Razors, Mobile Phones, Gaming Platforms and probably even cars in some cases. If Sony had cottoned onto this strategy, Beta would have been the worldwide video standard and they would have been paid back massively in royalties. Shifting hardware at a loss to lock in consumers is the oldest trick in the book. Nowhere is it more…
My understanding is Apple doesn't make all that much money off the iTunes Store using a similar model. Does it really work for digital media? (besides console games)
Apple doesn't use a similar model, they use the exact opposite model. They sell content at minimal profit to enhance the ecosystem for their devices, which they make a very tidy profit on.
Re: Amazon's Profit Plunges 73%
#48Earlier quoted context omitted.
Has that been confirmed? I've heard anywhere from $5 to $50, and its always been from analysists trying to estimate the cost from parts. As far as I know, the only people who really know how much the Kindle costs to make are Amazon.
This piece gives a run down of all the analysts claims, with some calculating a $50 profit instead but as you can imagine none of it is substantiated. http://news.cnet.com/8301-1023_3-20114722-93/amazon-kindle-f...
Interesting. To summarize, it looks like the $50 loss comes from an analyst comparing it to the iPad, whereas the $50 profit claim comes from a firm comparing it to the more-similar BlackBerry Playbook. The research firm that did a tear-down estimated it at about a $10 loss.
In other words, no-one really knows, but it looks like they're probably closer to breaking even than chugger claims. Chugger is taking the worst-case estimate here, and also the one that seems the most unsubstantiated.
Thanks for the link.
Re: Amazon's Profit Plunges 73%
#49Earlier quoted context omitted.
Crazy moves like "heavy spending on warehouses, data centers and digital-content offerings" An online store buying stock and building infrastructure !!!!! Crazy , they should be borrowing money and paying themselves bonuses before going bust - that's what Wall St wants
How about the $50 Amazon is losing per Kindle Fire sold?
This number is meaningless(and probably wrong) if you don't know the extra profits it would generate, and what's at stake here.
Some estimates(read:guesses) think that 50% of kindle users will subscribe to to amazon prime. Prime users are extremely loyal to amazon, do all their online shopping in amazon and use brick and mortar shops much less than before signing with prime.They tend to buy 3x-4x than before, in amazon.
Prime is a very hard service to provide. It requires a big and expensive logistics chain. It's a monopoly level competitive advantage. It can make amazon a monopoly in the range of walmart (maybe).
Also the kindle fire is a great advertising unit. Better than TV - because the ads can be much more targeted, And you can buy with a single click from the ad.
Combine the two, and amazon gets almost total control of the customer.
And given Bezos's brilliance that's probably only the tip of the iceberg.
So what's a little discount on a little gadget to get all of this ?
Re: Amazon's Profit Plunges 73%
#50I wonder if analysts have learned yet not to dismiss apparently crazy moves by Jeff Bezos.
For years I though Bezos was crazy and that Amazon could never, ever repay all the billions it had raised/spent. I was so, so wrong... I wouldn't bet against Bezos.
From all I've heard, Bezos is more "crazy like a fox" than Jobs was.
There's a lot to hate about Amazon. Apparently, it's a totally caustic work environment, that's only making money because Bezos is such a brilliant strategist.
Like A/B testing everything, before it was popular.
Like telling everyone they need web APIs for everything they do, and will be fired if they use non-web APIs to other team's apps. Way to shove SOA down people's throats! The pay-off is modular systems.
EC2. Margins will drop, but he'll make money on up-selling special Amazon services.