Wall Street was expecting tablets from Amazon to be less popular given that the marked is filled with similar product. Much to their surprise, quarterly results show that Kindle Fire boosted the sales of the company as customers began to purchase products from the world’s largest Internet retailer through their tablet, says Reuters.
Amazon made a good move when they decided to produce their own Kindle tablet as their efforts have started to pay off. Many more customers have used the device to purchase products from Amazon, partially because they wanted to, partially because they were constrained by the rules of the company. Either way, Amazon shares surged nearly 15 percent and now the market value of the company is bigger than $10 billion.
Analysts were surprised and delighted at the same time to see that their forecasts were exceeded by the company. Colin Sebastian, an analyst at Robert W. Baird & Co., spoke with the press and acknowledged that Amazon was not able to beat their expectations in the past three or four years.
Luckily, the strategy that the online retailer has adopted last year seems to work. According to analysts, Amazon is investing its money in three major domains, that is, in fulfillment centers which offer support to their online retail, in video and multimedia content and in its infrastructure for cloud computing. The ace up the sleeve was Kindle Fire which was released to compete with Apple’s iPads.
Some analysts said that the company will be forced to make compromises in order to continue its reputation as world’s largest retailer. The main argument that was used by skeptics was that Amazon will be forced to sell at breakeven or a small loss to survive on the market, but Fire proved the opposite.
Kindle Fire was not only meant to increase sales, but also to help the online retailer make the shift from physical products like books, DVDs and CDs to their digital versions. Stifel Nicolaus analyst Jordan Rohan was very pleased with the results of the first quarter because it had “something for everyone, growth and margins to satisfy investors”.