Amazon profits dip despite Kindle boost

A doubling in UK sales of its Kindle ebook reader failed to stop Amazon – the world’s biggest online retailer – suffering a profits slump. The Seattle-based group said sales rose 35% to $17.4bn (£11bn) in the final quarter of 2011 as the number of Kindles sold worldwide rose 177% in the last nine weeks of the period.

But Amazon’s net income fell 58% to $177m (£112.4m) despite the strong sales as it invests in new products and expansion. It warned there was a possibility of an operating loss in the current quarter.
In the UK, twice as many Kindles were ordered over Christmas as the previous year, making it the best selling product in 2011 as a whole.
Following the launch of an updated version of the device, sales of e-books in the UK were almost five times higher than a year ago.
Amazon said it took orders for more than three million items on its busiest day of the Christmas period on “Cyber Monday” – December 5.
The rate of around 35 items ordered every second over the 24 hour period compares with the 2.3m items ordered on the busiest day of 2010.
Amazon’s seven UK fulfilment centres shipped over 2.1m items in one 24 hour period, amounting to 1,124 tonnes of goods, as on average a delivery truck left an Amazon centre once every 2 minutes and 45 seconds.
Alongside the Kindle, Amazon’s second most popular product was the DVD version of Harry Potter and the Deathly Hallows Part 2. Now That’s What I Call Music! 80 also featured in the top ten of Christmas best-sellers.
Its new Kindle Fire device, which has a touch-screen and can stream films from the internet, was its best-selling product worldwide over the period.
Analysts have said it does not make much money from selling ebook readers, instead hoping to make a profit on selling books for the devices.