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Aggressive Kindle pricing sees Amazon's 2011 income down 45% to $631 million

Aggressive Kindle pricing sees Amazon's 2011 income down 45% to $631 million
As its eReader rivals would no doubt attest, one of the strongest plays in Amazon's arsenal when it launched its first tablet was always going to be Amazon.com.

The ability to push Kindle Fire via the world's most popular online retail site is a big bonus, even if the company's aggressive pricing has had a short knock-on impact on profits.

The Kindle gift

As has been the case since launch, the firm has chosen not to publish any figures, but Amazon claims sales of Kindle devices jumped 177 percent during the nine-week holiday period ending 31 December.

That growth was largely driven by Kindle Fire, which the company claims has been its bestselling and most gifted device on Amazon.com since it was launched 17 weeks ago.

It expected that total sales in North America are now over 6 million units.

"We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the US and Europe," said founder and CEO Jeff Bezos.

"Our millions of third-party sellers had a tremendous holiday season with 65 percent unit growth and now represent 36 percent of total units sold."

Apps away

As a result, Amazon's net sales for is 2011 financial year increased 41 percent in 2011, hitting $48.1 billion compared with $34.2 billion in 2010.

Operating income fell by 39 percent, however, coming in at $862 million, while net income was also down 45 percent to $631 million.

Nonetheless, Amazon ended the year on a high – Q4 revenue up 35 percent to $17.43 billion – with the firm also citing its Appstore for Android as a top performer.

In all, the store's customer base nearly tripled in Q4 2011 from the previous quarter, while more apps were downloaded during the final quarter of the year than in all previous quarters combined.

[source: Amazon]

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.

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