Amazon Strategy Boosts Kindle and Fire

Some of Amazon's strategic investments have been questioned, but it appears the Amazon Kindle and Fire tablet are paying off, The Street reported.

Following Black Friday sales, Amazon said its Fire tablet sales increased three times from this time last year on the retail holiday. Kindle e-readers grew four times from last year's Black Friday sales. Those sales could be much larger, however, as that amount is only what sold on Amazon's site.

"This holiday there are going to be a lot of customers opening up new Amazon devices," Dave Limp, senior vice president of Amazon Devices, said in a company statement. "We're energized by the year-over-year growth of tablet and e-reader Black Friday sales on, plus the success of the new product categories we've launched this year."

Amazon's successful weekend comes during a time when there's been a slowdown in tablet purchases, The Street reported.

"Research firm IDC noted that the tablet market is expected to grow just 7.2 percent in 2014, down from 52.5 percent in 2013. IDC attributed the slowdown largely due to a decline in iPad sales, noting that the life cycle on tablets has continued to lengthen increasingly resembling those of PCs more than smartphones. IDC noted that the life span for tablets is at least three years, and in some cases, more than four years," the report said.

Amazon's tablet sales increase were likely brought on by Amazon's decision to cut prices as the Kindle, Kindle Paperwhite, Fire HD 6 and Fire HD 7 were reduced by $20-30 over the weekend. Amazon also cut its Fire Phone to $199, which was likely in direct response to its massive leftover inventory of the phone that hasn't caught on with consumers. Amazon CFO Tom Szkutak said in October that the Fire Phone investment cost the company about $170 million to stock and get sold. During that time, he would only reveal that Amazon has $83 million in inventory of the phone.



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