Amazon is predicting record Kindle sales next quarter, just as Apple is predicting record iPhone and iPad sales next quarter. But there’s one key difference.
As a result of those record sales, Apple could see a $40 billion quarter in terms of revenue — that will undoubtedly lead to record profit. Meanwhile, Amazon, even with record sales, is warning that their numbers could dip. They may even lose money next quarter. Possibly a lot of money.
Apple is going to set records for their two most financially successful products. Amazon is going to set a record for a product that they may actually lose money selling.
Apple and Amazon play in the same general space now, but they play in that space in the exact opposite way of one another.
Apple’s model clearly works in this space. Amazon’s model? We’ll see. Remember, they’ll be competing with Apple on the price of much of their digital content as well.
The ability to upsell Amazon Prime may end up being the key here…
Update: And a good follow-up tweet from Michael DeGusta:
…and next quarter Apple will actually report their iPhone/iPad sales while Amazon will not report their Kindle sales.
Amazon has never reported actual Kindle sales numbers in their earnings statements. It’s very odd. They always talk about setting sales records, but they refuse to back those claims up with any actual data. It’s like bragging you’re the best at something but when asked why that’s the case, you respond with “just because”.
Maybe Amazon will change this odd trend and actually report tangible numbers in the holiday quarter.
Update 2: As a few have pointed out, the wording in The Next Web’s post is a bit confusing. They talk about decreases in revenue, but it would seem they actually mean net income (with revenue growth not quite lining up with record sales growth). I’ve tweaked my wording to make this more clear.
As always, profit is the key here — it’s the money you get to keep. Again, with their record revenue, Apple will undoubtedly also see record profit. But with their own massive revenue, Amazon may actually lose money next quarter. Their release indicates that Q4 income could be anywhere from a $250 million gain to a $200 million loss! Think about that for a second. That’s pretty crazy.