The world's biggest on-line retailer, Amazon, has announced a 70% drop in profits, largely caused by investment in its new iPad-killer Kindle Fire tablet.
Income for the third quarter was £40m. No figures have been given, but it's known that Amazon is pumping huge sums of money into its new Kindle range. Each device has a heavily subsidised selling price, with Amazon banking on making big profits from the sales of apps, books and newspaper and magazine subscriptions.
(Via: BBC)Jeff Bezos, the founder and chief executive of Amazon, said: "In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."Amazon also forecast lower-than-expected sales for the next quarter, which includes the crucial Christmas period, and said it could even see an operating loss as it continues to invest in the Kindle Fire.Amazon's profit margins have generally been lower than other technology firms, a situation that analysts say is now catching up with them.
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