Amazon's on Fire

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The Amazon Kindle Fire and new line of cheap Kindles have been a huge success (this is not really surprising, considering they cost about 30-40% less than the competition, and they are really nice products).

The company said that sales have from by 44%, and that last month it had its "biggest order day ever for Kindle, even bigger than previous holiday peak days." In other words, Amazon is kicking ass, taking names, and making other players in "the space" a wee be anxious.

And because of that, Amazon's shares are... down 12%

whatthefuckasaurus

Analysts are idiots is the short answer as to why this happened. Because Amazon is selling the hardware at a loss, they saw only one number - Amazon missed its quarterly earnings target. And because of that, they hammered the stock. This is so amazingly stupid, I can barely believe it. Amazon is clearly going after an install base, using price as a hammer to knock Apple's overpriced iPad off its pedestal -- something Motorola, HP and Samsung were all too stupid to do, resulting in their pathetic market share (and the touchpad fire sale - which did finally get it some market share....) 

Again, as I wrote before, Amazon is first an foremost a store. The original Kindle was an amazing tie-in to one aspect of that store (books), but the Kindle Fire is a portal to everything that Amazon offers. From the excellent Amazon android app with its one-click two day shipping (damn I love that), to movies through Prime, to the Amazon app store (the only one you can use with the Fire) and of course, to books: these are not just tablets, they are recurring revenue streams. Even if the tablets average only a 2-3 year lifespan, Amazon will be making back their margin many times over. Any analyst too stupid to see that should be fired. 

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