There may be more profit in Amazon's Kindle Fire than previously anticipated. RBC Capital analyst Ross Sandler reached this conclusion after assessing the "results of a proprietary survey of 216 Kindle Fire owners," Forbes reported.
"One high level conclusion is that Kindle Fire unit economics are likely to be more favorable than consensus expectations, based primarily on frequency of digital goods purchases," Sandler wrote. "Our assumption is that Amazon could sell 3-4 million Kindle Fire units in Q4, and that those units are accretive to company-average operating margin within the first six months of ownership. Our analysis assigns a cumulative lifetime operating income per unit of $136, with a cumulative operating margin of over 20%."
Other notable findings from the survey:
- Most frequent uses for the Fire were e-book reading (71%) and browsing the Web (39%).
- Most important reason given for buying a Fire: gift (47%), features (27%) and price (20%).
- More than 80% of Fire owners have purchased an e-book, and 58% had purchased more than three e-books within 15-60 days of purchase.
- More than 70% had not used the Fire to buy physical goods on Amazon.com.
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A post-holiday survey of more than 1,400 people in the U.K. found that that 48% admitted they had received a gift on Christmas Day, but hadn't used it since opening the package. When asked by the pollster--MyVoucherCodes.co.uk--"to identify the gift, 22% said it was an Amazon Kindle, which over half (53%) saying it was because they had not downloaded any books to be able to use with the device yet," PC Advisor reported.