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November 27, 2012

Cyber Monday sale gives Amazon Kindle Fire boost

But all this investment is coming at a cost for online retail giant

By Steve Evans


Amazon has revealed that Black Friday and Cyber Monday, two huge days in the online shopping world, saw the company register more than double last year’s sales of Kindle devices.

The company also revealed that thanks to a promotion, where its Kindle Fire tablet was sold for $129 (£99 in the UK), Cyber Monday was the biggest ever single day for Kindle sales worldwide.

However the company does not publicly reveal sales numbers for its Kindle range, which includes the original eReaders as well as the newer Fire and Fire HD tablets. That makes it difficult to compare how well it is doing against rivals such as Google’s Nexus 7 and Apple’s iPad mini.

Dave Limp, vice president, Amazon Kindle, said the range has dominated Amazon’s top sellers list since the most recent product refresh in September this year.

"Kindle e-readers and Kindle Fires have held the top 4 spots on the Amazon worldwide best sellers list since launch, and that was before the busiest shopping weekend of the year," he said.

He added that nine out of the top 10 best selling items on Amazon around the world are Kindle devices, Kindle accessories or digital content.

This new line of business for Amazon – selling the devices as well as the content people consume on them – has come at a cost for the Seattle firm.

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As CBR reported earlier today the company has issued a $3bn bond in order to finance its continued expansion. As well as putting $1.16bn towards completing the purchase of its headquarters, the company said, the company will continue to invest in its Kindle range.

The investment in developing the Kindle range, as well as continued expansion of its Amazon Web Services cloud computing platform, has hit the company’s profits over recent quarters.

In the three months to the end of September the company recorded a net loss of $274m, compared to a net income of $63m the year previously. For the nine months to the end of September, net losses stood at $137m, compared to net income of $454m a year previously.

Meanwhile, IBM has looked at traffic for Cyber Monday and declared it the busiest online shopping day of the year. Sales that day jumped 30.3% from the year before and were up 36% on Black Friday, the day after Thanksgiving in the US when retailers slash their prices ahead of the pre-Christmas shopping period.

Interestingly IBM said 18% of shoppers used a mobile device to shop online on Cyber Monday, up 70% on the year before. The percentage of sales coming from mobile dives doubled to nearly 13%, IBM said.

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