Amazon is re-iterating that the company sold “millions” of Kindle devices including the Kindle Fire tablet during the holiday season. The company reported its quarterly earnings this afternoon — and as usual, Amazon isn’t spelling out just how many Kindle Fire, Kindle Touch, or other Kindle devices were sold.
But Amazon says Kindle device sales tripled during the holidays, and the Kindle Fire has been the bestselling product at Amazon every week since it was introduced 17 weeks ago.
Amazon is reporting sales of $17.43 billion for the fourth quarter of 2011, which is up 35 percent from a year earlier. But net profits dropped from $416 million during Q4, 2010 to $177 million in the last quarter of 2011 — and it could dip even further. Amazon says that it could actually lose money during the first quarter of 2012.
But while the company missed analysts’ estimates, there may be a good reason. Amazon is likely selling the Kindle Fire at or below cost in the hopes of creating new customers for its digital book, music, movie, and app stores. Theoretically, the more Kindle Fire owners are out there, the more money Amazon will eventually make off the sale of digital goods.
There’s evidence that this is already starting to happen. Amazon says the number of Amazon Appstore for Android customers also tripled in the fourth quarter of 2011, and it’s likely that most of those new users are Kindle Fire owners.
Apparently more people also downloaded apps from Amazon’s store during the most recent quarter than during all previous quarters combined. But what Amazon hasn’t told us is whether people are paying for those apps — or simply downloading some of the many free apps available in the Appstore.