analyst downgrades Amazon due to Kindle - Page 3

Zetmolm · 06-29-2010, 05:29 PM

Quote:

Originally Posted by BVLarson

As I see it, the factor the article isn't taking into account is the exploding ebook market. As it reaches into the billions, Amazon won't hold as big of a share, but the number of dollars they reap will continue to expand. Competition isn't so bad when you are tripling sales in an industry every year.

The more e-books we buy, the less p-books are sold. Amazon is big in both markets, so both on the winning and the losing side. In other words, Amazon is also competing against itself. I think we should look at the book market as a whole, not just focus on e-books.

Zetmolm · 06-29-2010, 05:45 PM

Quote:

The analysis does not understand the business model. While it is correct that Amazon will be losing $70 per unit, which is huge, amazons real business comes from the sales of books and not Kindles. The reason to push the kindles is that they eventually push book sales.

I think the analyst does understand the business model, but her job is probably not to look at the long term prospects. Her job is to tell people whether or not it is a good idea to buy Amazon stock right now. It would be a good idea if you can make a profit soon, not if you can make a profit in so many years; that's how the stock market works. All of us who ever worked in a publicly owned company probably know how difficult it can be to look further than the next quarter. 'Shareholder value' often seems to be synonymous with 'short-term profit for people who want to sell their shares'.

Actually, the fact that this analyst downgrades Amazon now does not rule out the possibility that she is aware that Amazon's short-term loss may lead to a higher market share in the long term: buying Amazon shares right now may not be the best way to make some quick money, but if you wait a couple of months... She may already be thinking about an upgrade of Amazon again later this year.

SensualPoet · 06-29-2010, 07:03 PM

Quote:

Originally Posted by kjk

The impact on Amazon's short-term and long-term future in eBooks because of the Nook, iPad, Google Editions, and the rapidly changing eBook market as a whole are all speculation right now. She seems to have taken all that into consideration when she cut her forecast for Amazon.

Quote:

Originally Posted by =X=

The analysis does not understand the business model. While it is correct that Amazon will be losing $70 per unit, which is huge, amazons real business comes from the sales of books and not Kindles. The reason to push the kindles is that they eventually push book sales.

Amazon is not "losing" $70 per unit at $189; they are ensuring future revenue streams of the sale of e-books. The reason Amazon has a "Kindle everywhere" strategy is to ensure the world buys content from Amazon -- on a iPad, iPhone, Android phone, Blackberry, Kindle e-reader, PC and Mac computer ... and anything else that comes along where folks want to read. They've taken great pains to ensure the reading experience can be synced cross-platform. And they are now layering in social networking.

The revenue, and profit, from the sale of Kindles alone for Amazon is a drop in the bucket vs. Amazon corporate activity. Let's hope the analyst isn't blinded by iPadism: Amazon is MUCH more than a Kindle hardware vendor, or even pbook or ebook vendor. They not only do a brisk business in a wide range of consumer goods, they are also the payment mechanism for tens of thousands of secondary retailers. And they also provide "cloud computing" for very large enterprises around the world.

If you look at the retail book business, Barnes & Noble just posted a much bigger than expected loss; Borders has been in chronic financial trouble; and other book retailers, in many nations, have been consolidating with peers trying to stay afloat. The reason isn't that the public has lost interest in books or reading: it's because Amazon is a fiercely consumer-centric competitor and is gradually winning (and I would argue earning) tons and tons of business. And making a profit at it.

I would not be writing down my Amazon stock (assuming I had some) at this point. In fact, I'd be a buyer. The recession is gradually lifting (fingers crossed) and Amazon sailed through that comfortably -- leaving it even stronger, relative to its peers, than ever before. That is not a recipe for ditching the stock.

Redcard · 06-29-2010, 10:41 PM

Quote:

Originally Posted by SensualPoet

I would not be writing down my Amazon stock (assuming I had some) at this point. In fact, I'd be a buyer. The recession is gradually lifting (fingers crossed) and Amazon sailed through that comfortably -- leaving it even stronger, relative to its peers, than ever before. That is not a recipe for ditching the stock.

Actually, the double-dip recession seems to be on.

But that said, I think I'd like to see some direction of Amazon. The Kindle Everywhere strategy is good, but I don't think it can include the hardware much longer. Why should it?

mikemc2 · 06-29-2010, 11:04 PM

I'd rather pick stocks at random that take an analyst's advice. Remember Enron, yeah, these people were rating it a "Buy" or "Strong Buy" right until the whole thing collapsed. IMHO stock analysts are either A) Stupid B) Gullible C) Crooked or D) All of the above. Lets face it, they are among the "best and brightest" that helped put us in the financial situation we're in now.

Hellmark · 06-30-2010, 12:33 AM

Because they have the Kindle, doesn't mean they're worth anyless, especially since the competition that the author of the article uses as the basis of his argument can access and buy from the Kindle store.

queentess · 06-30-2010, 08:23 AM

Quote:

Originally Posted by kindlekitten

my take is that she was comparing the two as e-readers and using the argument that the ipad has as the deal killer or sealer or whatever. I guess I still don't think they should be compared as ereaders

It doesn't matter if the iPad is compared as an ereader or not. What matters is that it IS taking marketshare from Amazon. You can classify it any way you want, but only the effects matter.

flyash · 06-30-2010, 08:43 AM

Anytime a stock analyst writes a report, you would be best served to consider doing the OPPOSITE of what he or she suggests you do.

J. Strnad · 06-30-2010, 10:38 AM

Market analysts, stock analysts, everyone who offers financial advice beyond the basic "Suze Orman" stuff...I give them 100% of the respect I give the carefully-coiffed evangelists on TV who profess to know what God wants me to do.

BenLee · 06-30-2010, 10:46 AM

Quote:

Originally Posted by flyash

Anytime a stock analyst writes a report, you would be best served to consider doing the OPPOSITE of what he or she suggests you do.

LOL

Actually I do something quite similar for any endeavor. I look at what the majority is doing and proceed to do the exact opposite. In this case, the majority are probably likely to follow the advice of these stock analysts, so the analyst report is actually a great guide for what NOT TO DO.

astra · 06-30-2010, 11:49 AM

Heh. Reminds me of:

Quote:

"Whenever you find yourself on the side of the majority, it is time to pause and reflect."

— Mark Twain

vaughnmr · 06-30-2010, 02:14 PM

Quote:

Originally Posted by queentess

It doesn't matter if the iPad is compared as an ereader or not. What matters is that it IS taking marketshare from Amazon. You can classify it any way you want, but only the effects matter.

Is it??? Or does Jeff have a whole new market to sell his ebooks on. I suspect there's a whole lot of books going to the Kindle for iPad/iPhone market now. I'm not really sure who is taking marketshare from whom...

BenLee · 06-30-2010, 04:05 PM

Quote:

Originally Posted by astra

"Whenever you find yourself on the side of the majority, it is time to pause and reflect."

Ah, great quote. I like it better the way he said it.

Thanks

queentess · 07-02-2010, 09:40 AM

Quote:

Originally Posted by vaughnmr

Is it??? Or does Jeff have a whole new market to sell his ebooks on. I suspect there's a whole lot of books going to the Kindle for iPad/iPhone market now. I'm not really sure who is taking marketshare from whom...

I misspoke. It's taking marketshare from KINDLE, not Amazon

I'm sure Amazon is making big bucks on the expanding ebook market.

advocate2 · 07-04-2010, 06:09 AM

Am I missing something?

Isn't the growing number of E-libraries around the country that have larger and larger collections responsible, at least in part, for individual readers using devices by other manufacturers?

Don't get me wrong, I just re-purchased a DX because of the new price point. It is a wonderful piece of hardware. I sold my first one last year, however, because so much of what I wanted to read was available in e-edition at the libraries I use in Vegas and DC.

Will there not be a point at which consumers will ask, Why should I pay Amazon or one of the other retailers for a book that I can get for free at my library?

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06-29-2010, 11:04 PM	#35
mikemc2 Zealot Posts: 128 Karma: 7878 Join Date: Sep 2009 Location: Milwaukee,WI Device: Sony PRS-505,Kindle 3,Nook HD+,iPod Touch,Kindle PW2	I'd rather pick stocks at random that take an analyst's advice. Remember Enron, yeah, these people were rating it a "Buy" or "Strong Buy" right until the whole thing collapsed. IMHO stock analysts are either A) Stupid B) Gullible C) Crooked or D) All of the above. Lets face it, they are among the "best and brightest" that helped put us in the financial situation we're in now.

06-30-2010, 12:33 AM	#36
Hellmark Wizard Posts: 2,592 Karma: 4290425 Join Date: Jun 2009 Location: Foristell, Missouri, USA Device: Nokia N800, PRS-505, Nook STR Glowlight, Kindle 3, Kobo Libra 2	Because they have the Kindle, doesn't mean they're worth anyless, especially since the competition that the author of the article uses as the basis of his argument can access and buy from the Kindle store.

06-30-2010, 08:43 AM	#38
flyash Groupie Posts: 196 Karma: 1003498 Join Date: Jun 2010 Device: none	Anytime a stock analyst writes a report, you would be best served to consider doing the OPPOSITE of what he or she suggests you do.

06-30-2010, 10:38 AM	#39
J. Strnad Guru Posts: 915 Karma: 3537194 Join Date: Feb 2009 Device: Kobo, Kindle 3, Paperwhite	Market analysts, stock analysts, everyone who offers financial advice beyond the basic "Suze Orman" stuff...I give them 100% of the respect I give the carefully-coiffed evangelists on TV who profess to know what God wants me to do.

07-04-2010, 06:09 AM	#45
advocate2 My Kingdom for Karma Posts: 430 Karma: 7125 Join Date: Jul 2009 Location: Las Vegas Device: Sony 350, 650, 950, Nook Color	Am I missing something? Isn't the growing number of E-libraries around the country that have larger and larger collections responsible, at least in part, for individual readers using devices by other manufacturers? Don't get me wrong, I just re-purchased a DX because of the new price point. It is a wonderful piece of hardware. I sold my first one last year, however, because so much of what I wanted to read was available in e-edition at the libraries I use in Vegas and DC. Will there not be a point at which consumers will ask, Why should I pay Amazon or one of the other retailers for a book that I can get for free at my library?