As many investors are aware, Amazon (NASDAQ:
) has remained tight-lipped about the true success of its tablets.
The company has issued numerous press releases touting how well the
Kindle Fire is performing at retail, particularly on Amazon.com. In
November the company
that worldwide Kindle device sales had more than doubled over the
year-ago period. Amazon provided a number of sales highlights,
Cyber Monday 2012 was the biggest day ever for Kindle sales
worldwide. The top 4 spots on the worldwide Amazon best sellers
list since launch nearly three months ago are Kindle e-readers and
Kindle Fires. Kindle Fire HD is the most gifted and most wished for
product on Amazon worldwide since launch. 9 out of the top 10
best-selling products on Amazon worldwide since 9/6 are Kindles,
Kindle accessories and digital content.
Those numbers seemed to confirm Amazon's claim that the Kindle
Fire, Kindle Fire HD and 8.9-inch models were selling very well.
However, not once did Amazon state exactly how many units had been
In fact, the company has gone out of its way to promote how well
the Kindle Fire is performing without actually stating any official
numbers to back up these claims.
Some investors might think that it is because Amazon has a
different strategy from Apple (NASDAQ:
), which likes to remind everyone that its products sell large
quantities on a quarterly basis. Others might assume that Amazon
does not want its competitors to know exactly how fast it is
catching up, which could slow their defenses or delay a
Even if that is true, that does not change the fact that Amazon
made a very curious announcement today: it decided to
reduce the price
of the 8.9-inch model to $269.99. The $30 price cut might not sound
like a huge adjustment, but the company has also reduced the 4G
model from $499 to $399.
This could have a couple of positive explanations. First, Amazon
may be planning to pull-an-Apple and release the next Kindle Fire
sooner rather than later. That being the case, Amazon would have
every reason to reduce the price of the existing model to deplete
Second, Amazon might have found a way to reduce the cost of the
item and decided to pass the savings on to the consumer. In fact,
that is exactly what Dave Limp, Vice President of Amazon's Kindle
division, said today.
"As we expand Kindle Fire HD 8.9" to Europe and Japan, we've
been able to increase our production volumes and decrease our
costs," Limp said in a
. "Across our business at Amazon, whenever we are able to create
cost efficiencies like this, we want to pass the savings along to
Still, it is hard not to wonder if this is really just a way to
increase sales for a product that did not live up to
Apple received a similar degree of skepticism when it
reduced the price
of the 13-inch MacBook Pro with Retina Display. While Apple
publishes the number of Macs that are sold each quarter, the
company does not specifically state how many individual units are
sold. Thus, investors are repeatedly forced to speculate about the
source of Apple's price cut -- just as they are forced to speculate
This is not the first time that the Kindle Fire has experienced
a questionable price reduction. The company knocked $50 off the
8.9-inch model not once
in the same week last December. The discount came with a catch,
however. Amazon said that it would
subtract the discount
from the refund of those who decided to return the item.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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