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Amazon Announces Good Third Quarter Results
Amazon recently reported their best ever Q3 figures. Net income grew to $199 million - a 70% increase on the same period last year. Revenues and profits both exceeded expectations and a strong fourth quarter is now expected. Following the announcement the Amazon share price rose by 27% based on the expectation that they will shortly become the dominant internet retail outlet source.
One of the key factors in Amazon's success has undoubtedly been the success of the Amazon Kindle e-book reader. The Kindle, originally released in 2007 and now in its second generation, accounts for 60% of the US e-book reader market. After a long wait Amazon has started to ship the Kindle 2 reader to more than 100 different countries around the world. International shipping was accompanied by a second price drop since the launch of the Kindle 2 in February of 2009.
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.
Apple, Microsoft, Plastic Logic and Sony all have e-book readers either in development or ready for imminent launch. The e-book market is still nascent, and it is developing and growing rapidly. Amazon have, thus far at least, enjoyed a dominant position - and the Kindle reader is now their best selling product. It does not seem at all probable that they will be inactive whilst other manufacturers overtake them.
Of course, Amazon have other profit generators over and above the Kindle. Membership of Amazon Prime - which offers better delivery options for a one off yearly payment - also saw very strong growth. Growth was highest in international markets.
A company spokesman predicted that business analysts could expect Amazon to expand both the categories of goods on offer along with geographical expansion over time.
Fourth quarter sales for Amazon.com are expected to range between $ 8.13 billion and $ 9.13 billion.
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