Amazon posted its earnings last night with sales up 22% on the quarter. But the key trend highlighted is the massive move to digital reading and consumption on Kindle devices, with physical book sales at their slowest growth since Amazon's founding.
By the Numbers
Amazon's net sales were up an impressive 22% to $21.27 billion in the fourth quarter, and although they were below Wall Street estimates, the company's stock rose on the news. Operating income increased 56% to $405 million in the fourth quarter, compared with $260 million in fourth quarter 2011.
CEO Jeff Bezos, noted that after five years since the launch of the first Kindle, "eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%."
For the full year, Amazon's net sales increased 27% to $61.09 billion, compared with $48.08 billion in 2011. With operating income having decreased 22% to $676 million, the overall figure was a net loss of $39 million.
Playing With Technology
The company listed among its highlights that Amazon’s tablet was the most popular item for customers (without giving any sales numbers) as the Kindle Fire HD continued its run as the top best-seller, most gifted, and most wished for product. At the end of the year, the various products in the range including the Kindle Fire HD, Kindle Fire, Kindle Paperwhite and original Kindle held the top four spots on the Amazon worldwide best seller charts since launch.
Among recent innovations for those many users were the introduction of AutoRip, offering digital MP3 versions of albums purchased on Amazon, the FreeTime kid's service and a rapidly growing digital library of films, music and books now totalling some 23 million items. It also recently acquired Ivona to secure improved text-to-speech features for the Kindles.
Amazon's Big Iron in 2012
AWS continued its rapid pace of innovation by launching 159 new services and features in 2012, including the ability to run Windows Server apps. Amazon also noted that it has lowered AWS pricing some 10 times in 2012.
AWS also announced that SAP Business Suite is now certified to run on the AWS cloud platform. Enterprises running SAP Business Suite can now leverage the on-demand, pay as you go AWS platform to support thousands of concurrent users in production without making costly capital expenditures for their underlying infrastructure. AWS also announced that SAP HANA, SAP’s in-memory database and platform, is certified to run on AWS and is available for purchase via AWS Marketplace.