Amazon’s profit surged to $513 million in Q1 of 2016, helped by a 28% jump in sales.
The company’s sales hit $29.1 billion for Q1 of 2016, helped by rising sales of its Kindle reading devices and Fire tablet computers.
Both sales and profits were higher than analysts had been expecting and Amazon shares jumped in after hours trading.
Amazon reported strong growth in customers for its Prime service, which includes free delivery and TV shows.
The results were a positive sign for investors who had been rattled by disappointing earnings from Apple and Microsoft.
Amazon’s cloud services unit was an important source of sales growth.
The cloud business rents data storage space and software services to companies, and is Amazon’s fastest growing unit.
Amazon’s revenue rose 64% year-over-year, reaching $2.5 billion.
Investors have been watching Amazon’s cloud operation closely, particularly after one of its biggest customers, Apple, announced it would be moving some of its business elsewhere.
Since the start of 2016 Amazon has added new televisions shows and films to its Prime service, which helped to attract new users.
In April, the company introduced options to pay monthly for the service.
The plan is part of an effort to compete with video streaming services like Netflix and Hulu.
Amazon also attributed the increased number of Prime members to the expanded list of products eligible for free two-day shipping.
It did not detail sales of devices like the Kindle and Fire table, but did say that the division has seen growth.
“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” CEO Jeff Bezos said.
Amazon Kindle color tablet, the new iPad rival, will be unveiled tomorrow during a press conference.
Amazon is holding a press conference on Wednesday where it’s widely expected that the giant online retailer will unveil a new color Kindle that puts it on collision course with Apple – a device that could be half the price of iPad 2.
Other tech giants from Motorola to Nokia have tried the same thing, of course – and crashed and burned.
But Amazon is already the world’s largest online retailer – and comes armed with a one-click ordering system that can deliver entertainment from books to films to music with a single button-press.
Other iPad rivals may simply not have been entertaining enough.
Amazon Kindle tablet is rumored to cost a mere $250 - including “free” access to Amazon's Prime film-streaming service
Amazon’s Kindle tablet is rumored to cost a mere $250 – including “free” access to Amazon’s Prime film-streaming service, vastly undercutting Apple’s price.
Amazon Kindle tablet is also more pocketable, at a rumored seven inches.
Analysts suggest that Amazon’s willingness to sell hardware at a loss in order to sell more e-books, films and music will put it in a position to offer the first serious challenge to Apple – whose “core” business is still selling phones, tablets, and iPods.
According to Forrester Research, the US tech industry analysts, Amazon Kindle tablet could be the “only credible iPad competitor” and could even “completely disrupt the status quo”.
Even on iPad, consumers often prefer buying books via Amazon’s Kindle app to Apple’s own less-well-stocked iBooks store.
“Apple sells software and services, but the lion’s share of Apple’s revenue still comes from hardware,” wrote Forrester.
“This makes it vulnerable to a company, such as Amazon, that isn’t seeking profit from hardware sales.”
The tech blog Techcrunch suggested that Amazon Kindle tablet might be called Kindle Fire.
Simon Osborne-Walker, Associate Editor of Britain’s Stuff magazine, said of Amazon Kindle tablet:
“Where other manufacturers have taken on Apple in a tech-spec arms race, Amazon’s all about the content.
“It doesn’t care if it makes a loss on every device it sells; they’re just shop windows and cash registers connecting to the world’s biggest superstore.”
Amazon Kindle is already the company's best-selling product and the colour version is described as the 'first credible rival to iPad 2
Industry insiders have, however, cast doubt on Amazon’s ability to produce an operating system that looks and “feels’ as good as Apple’s, however.
Amazon’s “strength” has always been the technologies that underlie its products – such as the one-click buying system it pioneered, or the “recommendation” system that is now imitated on many other e-commerce sites on the web.
Whether Amazon can produce an experience as slick as Apple’s best-selling iOS remains to be seen.
Analysts still expect Apple to dominate the tablet market for “several years” – at present, Apple controls at least 75% of tablet sales worldwide, despite High Street chains such as Comet selling Android tablets for as little as $300.
Amazon Kindle tablet vs. iPad:
Kindle an Android tablet – but TechCrunch claim to have seen a prototype that adopts Amazon’s orange, black and blue color scheme.
Kindle will have a seven-inch display and will be much more pocketable than iPad.
A bigger, 10-inch version is due, but not before Christmas.
The smaller model of Kindle tablet will cost “around half the price” of the entry-level of iPad 2.
Kindle’s price will include access to Amazon Prime – including a new film-streaming service, and faster deliveries on “real world” Amazon products.
