Kindle Fire popularity is hurting profits
Over the Christmas shopping season one of the most popular gifts of the tech sort were eReaders like the Amazon Kindle line. Amazon reportedly sold more than a million Kindle's in a single year. The problem with selling a huge number of the Kindle Fire tablet is that Amazon takes a bit of a loss on each one it sells.
The Fire sells for $199 and costs them about $202 to make. The fact that big sales of the Fire add up to a loss has Goldman Sachs hinting that Amazon might miss its sales estimates for Q4. The stock has fallen 4%, talk about going broke making money.
The saving grace here could be the fact that Amazon is hoping taking a bit of a loss on the Kindle Fire will add up to big sales on the backend as the users start to consume lots of content. The Fire was the best selling product on the Amazon mobile site during the holidays. Amazon didn't split Fire sales out, but confirmed it had sold more than one million Kindles a week in December.