Amazon shares down for the year based on agressive pricing concerns for ventures like the Kindle Fire
While Amazon unveiled novel products like the Kindle Fire tablet and other new appearances in the Kindle lineup, and online sales picked up like never before this year for the holidays, investors are very worried about Amazon's pricing strategies.
The Kindle Fire, for example, is sold at cost, if analysts are to be believed, and Amazon hopes to make a dime on selling its products and services, using the $199 tablet as a gateway to the Amazon ecosystem. That strategy has been tried many times before, be it outside the tablet market, and sometimes it works, sometimes it doesn't, not to mention numerous teething problems users are having with their slates.
Nothing guarantees that Amazon's Kindle Fire and other ventures will pay off, but Jeff Bezos's hubris, so investors are jittery, and they might have a point. In the short run Amazon's profit margin will surely take a hit because of its aggressive pricing strategy and R&D expenditures, while in this day and age the long run looks all too distant, hence the share price battering.
1. MalakiMills posted on 15 Dec 2011, 12:42 1
I think amazon is begin enough to manage and make a pretty decent buck off of their app store and music/book services.
2. JGuinan007 posted on 15 Dec 2011, 13:59 1
I agree I think I'd like to buy Amazon stock now at $170 and make a killing this spring when it goes up to $250 the Kindle Fire is selling like crazy stores can't keep up with demand and most of them are for X-mas presents so once Jan comes round their app store will be bringing in alot so buy low and buy now