Here are two important questions consumers will have to address as they judge Amazon‘s just-unveiled Fire Phone — a high end smartphone that most notably offers no-glasses-needed 3D images (with a process called Dynamic Perspective) and sensors so users can control the screen with head and eye gestures. Will the battery be powerful enough to handle all of its features? And will the impressive array of photo taking , media consuming, and shopping features justify the price: $199 (32 GB storage) or $299 (64 GB) with a two-year contract with AT&T? (Early buyers can get 12 months of access to Amazon Prime.) Investors apparently believe the package is a winner: Amazon shares are up 2.8% — with the increase coming after CEO Jeff Bezos began to describe his new product.
UPDATED WITH TWITTER CAMPAIGN INFO: Comedy Central’s Stephen Colbert last night urged his viewers to boycott Amazon because, “I just found out it’s deterring customers from buying books from Stephen Colbert.” Amazon is in a battle with Colbert’s publisher Hachette, and has been accused of refusing orders for upcoming Hachette books, raising prices, and deliberately delaying shipments — sometimes by 3-4 weeks. (Amazon lists the ship date on orders for Colbert’s book, America Again: Re-Becoming the Greatness We Never Weren’t, as “two to four weeks”). “This is a big blow to my bottom line,” Colbert said, announcing he had made arrangements through a large independent Portland-based bookstore called Powell’s Books to sell copies of a new Hachette release, California, by Edan Lepucki, on his show’s website. He also urged viewers to download a sticker — also available on his site, that says “I Didn’t Buy It On Amazon” to slap on all their books and other products. “Watch out Bezos — this means war!” Colbert warned Amazon founder and CEO Jeff Bezos. (See the video below.)
Amazon CEO Jeff Bezos had the 60 Minutes gang agog on Sunday night’s program when he surprise-announced Amazon’s plan to build an army of delivery drones that will drop purchases at your doorstep within 30 minutes. Here’s anchor Charlie Rose and the 60 Minutes production crew peeling back the curtain on their delight at the news of our robot delivery future (AKA “Amazon Prime Air”), which Bezos says is just 4 or 5 years away:
The Washington Post is making good on a promise it made in August when it agreed to sell its flagship newspaper to Amazon founder Jeff Bezos. The $250M deal closed October 1. And today the Post unveiled the new name for the entity that owns six Post-Newsweek TV stations, Cable One cable systems, The Slate Group, Kaplan educational services and other properties: Starting tomorrow it will be called Graham Holdings Company, with its stock symbol changing from WPO to GHC. The newspaper was founded in 1877, and the Washington Post Co was incorporated in 1947 under Philip Graham.
As expected, Amazon.com founder Jeff Bezos has officially become the new owner of the Washington Post after buying the paper for $250 million in August. Publisher Katharine Weymouth made the announcement today in an emailed memo that staff reporters Tweeted around Tuesday afternoon: “The sale of The Washington Post to Jeff Bezos is now complete. We are officially under new ownership, and a new era for The Washington Post begins.”
The numbers are mixed but encouraging enough to lift Amazon shares about 1.4% in after-market trading. The e-retailer generated $82M in net income, -36.9% vs the period last year, on revenues of $16.1B, +21.9%. Analysts expected revenues to come in just a little higher at $16.2B. But diluted earnings per share at 18 cents were twice as high as the Street forecast. Media sales in North America were up 14% to $2.5B, and worldwide were +7% to $5.1B. North American electronics and other general merchandise were up 28% to $6.1B, with worldwide sales +28% to $10.2B. CEO Jeff Bezos used the earnings release to talk up Amazon’s new effort to greenlight TV shows. “The pilots are out in the open where everyone can have a say,” he says. “I have my personal picks and so do members of the Amazon Studios team, but the exciting thing about our approach is that our opinions don’t matter. Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members.” The report also highlighted streaming licensing agreements with A+E Networks, CBS, FX, PBS, and Scripps Networks.
UPDATE, 11:10 AM: It’s official — there’s a new Kindle. It’s called Kindle Paper White, costs $119 and will ship October 1. At 9.1 millimeters and 7.5 ounces, it is very slender. “Thinner than a magazine, lighter than a paperback,” Amazon CEO Jeff Bezos said as he announced the product in Santa Monica this morning. A higher-priced $179 Kindle Paper White has free 3G wireless. Both also have a bright light so you can read in the dark and it has eight weeks of battery life. It also has a timer that tracks individuals’ reading speed and can then tell them how long it will take them to finish a chapter or a book. A total of 180,000 books available on the Paper White are exclusive to Amazon, Bezos said.
The CEO today also unveiled the new Kindle Fire HD. The new 8.9-inch tablet is designed to be almost glare free, comes with dual speakers and advanced WiFi. With a few implied digs at the cost and limitations of Apple’s iPad, Bezos said the 32 GB and 4G wireless tablet will retail for $499 and ships November 20. “Is it a little bit more expensive? Yes. Is it worth it? Absolutely,” he told the crowd.
Amazon shares touched an all-time high today of $252.27. With an hour to go before the market close, the shares are up around 1.8% — in line with the overall market. (The S&P 500 is higher than it’s been since May 2008.)
Amazon startled investors last night with its report of a huge 3Q profit miss. The stock is off about 11.5% this morning from yesterday’s close of $227.15 before the announcement. But analysts are taking the disclosure in stride, saying that Amazon’s just going through some growing pains while CEO Jeff Bezos awaits a huge inflow of cash from sales of the company’s new Kindle Fire tablet. RBC Capital Markets analyst Ross Sandler maintained his “outperform” recommendation on the stock, although he trimmed the target price to $240 from $265. “We view these quarterly pullbacks as good opportunities to add to (investment) positions, and see the upcoming Kindle Fire product launch as the next catalyst that should allow for revenue upside in 2012,” he says. Credit Suisse’s Spencer Wang also trimmed his target, to $200 from $210, yet maintained his “neutral” position on Amazon. He considers it a “core holding in the sector” but urges investors to wait for ”a more attractive entry point.”
The online retailer ended up with net profits of 14 cents a share — a far cry from the 24 cents that the Street expected. The company reported net income of $63M, down 72.7% vs last year’s 3Q, on revenues of $10.9B, up 43.9%. And Amazon says that in 4Q it could deliver anything from a $200M operating loss to a $250M operating profit. Confused? So are a lot of analysts, judging by the questions they asked in Amazon’s earnings call. The company didn’t even try to explain the lousy 3Q results in its press release. But the big surprise seems to be how much Amazon had to spend, in large part for new fulfillment centers and to prepare for the recent release of its Kindle Fire tablet. CEO Jeff Bezos says that orders for the device are so strong that the company plans to make “millions more” than it planned.
The news comes from a posting on the Amazon Prime site by the online retail company’s CEO Jeff Bezos. Here’s what he says:
I have big news for Amazon Prime members – we’ve just signed a deal with FOX to add a broad selection of movies and TV shows to our unlimited instant streaming service later this fall. The new additions from the FOX library include 24, Arrested Development, The X-Files, Ally McBeal, Buffy the Vampire Slayer, and – available on digital video for the first time – The Wonder Years. We now have deals with CBS, NBCUniversal, Sony, and Warner Bros, and adding FOX will bring the total to more than 11,000 movies and TV shows available for unlimited instant streaming.
Since launching earlier this year, we have now doubled the number of titles available in Prime instant videos, and there’s still more to come. Prime membership remains $79 a year, and of course features our unlimited free two-day shipping on millions of products. Prime is one of the best values anywhere.
Prime instant videos can be played on more than 300 HDTVs, Blu-ray players, and set-top boxes.
Look out Netflix…The deal brings old series including Star Trek, Frasier, and Cheers to Amazon Prime, increasing its library of streamable movies and TV shows to 8,000. Although the companies aren’t talking about the terms, Wells Fargo analyst Marci Ryvicker says it’s a “big positive” for CBS. Unlike the two-year deal that CBS cut with Netflix in February, she says the arrangement with Amazon probably just runs for 18 months and would include a payment for each subscriber as well an upfront fee. “These differences make a lot of sense to us given that Amazon is still in a ‘build-out’ phase when it comes to its streaming TV offering,” Ryvicker says in a report. The bottom line: She expects CBS to see $100M in revenue, most of it early in 2012.
Here’s the release about CBS’ deal with Amazon:
NEW YORK and SEATTLE – July 20, 2011 — CBS Corporation [NYSE: CBS.A and CBS] and Amazon.com [NASDAQ: AMZN] today announced a non-exclusive licensing agreement that will enable Amazon customers to stream television shows from CBS’s vast library. Terms of the deal were not disclosed.
Amazon Prime customers will be able to instantly watch thousands of episodes from the CBS library at no additional cost to their membership. With the deal, Amazon will add 2,000 episodes to grow the total number of Prime instant videos to more than 8,000 movies and television shows, and offer full seasons for 18 popular television