Amazon Is Hot Property As Kindle Fires Sales

Amazon Is Hot Property As Kindle Fires Sales

Shares in Amazon have leapt 15% in New York on news of a surge in revenue from digital content for the world's biggest internet retailer.'s first-quarter results beat Wall Street's most bullish expectations as previously heavy spending began to pay off through sales of more digital products on its new Kindle Fire tablet.

Kindle Fire , which is yet to launch in the UK, is the company's answer to Apple's iPad and other such devices.

Some analysts have suggested that Amazon has been selling it at cost or a small loss - relying on content to boost its earnings.

The Fire is important because it helps Amazon handle the shift from physical media products, like books, DVDs, video games and CDs, to digital versions.

Its e-readers, which are available in the UK , only handle books.

The company does not provide a country-by-country breakdown of its performance but North American media revenue, which includes books, DVDs and music, came in at $2.2bn (£1.36bn) in the first quarter, up 17% on the same period a year earlier.

Amazon credits digital content for the increase.

Overall, first-quarter revenue stood at $13.2bn (£8.16bn) - a rise of 34%.

Amazon has been spending heavily in three main areas - which had been a major concern for shareholders as profit margins suffered.

Investment has poured into distribution centres to support online sales, video content and other media businesses and infrastructure for its cloud computing service.

Net income declined, as expected, to $130m (£80m) from $201m (£124m) because of its continued development spending.

However, investors were cheered by revenues and earnings easily beating forecasts.

The leap in the company's share price boosted Amazon's market value by more than $10bn (£6.18bn).

During the first quarter, nine out of 10 of the top selling products on were digital products, including Kindle e-books, movies, music and apps, the company noted.
Ben Schachter, an analyst at Macquarie, said: "One of the concerns with the shift from physical to digital has been whether Amazon will be able to compete.

"They've done well in e-books but now it looks like they're also doing well in other areas like video."

:: In its latest quarterly results, Samsung has predicted its newly upgraded Galaxy smartphone will fuel further earnings increases.

The South Korean electronics firm posted a record $5.15bn (£3.17bn) profit for its last three months.

The third generation of the flagship Galaxy S is due to be launched in London next week.