Amazon is selling Kindle devices at a rate of 1 million per week, according to the company. The online retailer revealed those sales numbers just as its Kindle Fire, a full-color tablet, joins the battle against Apple’s iPad for holiday shopping dollars.
“We’ve already sold millions of units, and we’re building millions more to meet the high demand,” Dave Limp, vice president of Amazon Kindle, wrote in a Dec. 15 statement. “Kindle Fire sales increased week-over-week for each of the past three weeks.”
Amazon ordinarily never reveals sales numbers for any device in its Kindle line, making its current announcement all the more conspicuous. The company is placing a heavy bet on the Kindle Fire, which essentially operates as a portable vending machine for Kindle e-books and streaming content. In fact, given the tablet’s price of $199, estimated by research firm IHS as below its manufacturing cost, selling digital products is the only way for Amazon to recoup its investment and earn a profit.
“Amazon makes its money, not on Kindle hardware but on the paid content and other products it plans to sell the consumer through the Kindle,” Andrew Rassweiler, senior director of IHS’ teardown services, wrote in a Nov. 18 research note. “This is a similar business model to wireless companies such as AT&T or Verizon. They sell you a phone that costs them $400 to $600 or more to make for a price of only $200. However, they expect to more than make up for that loss with a two-year service contract.”
Amazon previously announced it was prepping an over-the-air software update for the Kindle Fire, an apparent response to complaints from some early users about the tablet’s performance and user interface. On Amazon’s Kindle Fire page, those complaints range from slow Web browsing to issues with multi-touch control; nonetheless, the four- and five-star reviews outnumber the one- to three-star ones.
Companies regularly issue software updates to patch problems with new devices. Apple, for example, recently pushed through an over-the-air update to solve reports of excessive battery drain on iPhones running iOS 5.
But the spate of news reports about Kindle Fire issues, even in the wake of Amazon announcing the software update, evidently compelled the company to break from its usual habits and announce sales figures.