Amazon’s 2015 Q1: Amazon Phase 2 has begun?
Amazon just celebrated two decades (although you could choose a different “birthdate” if you wanted to do that) with a very successful first (in terms of sales) “Prime Day”.
The company has famously been perceived as being forward-looking…more about the long term than the short term.
One thing that has meant is that they haven’t been making big (or often, any) profits. Investors have been betting that, eventually, profits would happen.
Well, that day is here.
Early today, they did a webcast with their results for the first financial quarter of 2015.
You can listen to a recording of the webcast, and see the slides from the presentation here:
Update: here’s the
If you’d prefer, you can also read the
They headline the press release with sales up 20%, but increasing sales is not a surprise for Amazon.
This is the real story, in my opinion:
“Net income was $92 million in the second quarter, or $0.19 per diluted share, compared with net loss of $126 million, or $0.27 per diluted share, in second quarter 2014.”
Look at that one again. The net income changed from a loss of $126 million to a gain of $92 million.
From what I can see (and I’m not a financial expert), there wasn’t anything particularly anomalistic. It doesn’t look to me like they couldn’t continue this for any obvious reason.
In terms of what specifically worked well…most of it. 😉 If you listen to the Q&A part of the webcast (always the most interesting part…you can jump there with a dropdown at the bottom of the screen), you hear that the investors aren’t that concerned with what we buy as customers. It’s more about efficiency, web services, fulfillment centers, and so on.
The press releases is a bit different and calls out items that are part of front-facing relationship with Amazon.
The third generation of the
A big star, though?
There are four bullet points related to the Echo and Alexa…which aren’t exactly the same thing. They talk about the Echo device, but they separately mention the Alexa Voice Service. Here’s the big point on that:
- Amazon opened the Alexa Voice Service to third-party hardware makers, giving them the tools to integrate Alexa into internet-connected devices.
Hypothetically, that means that we could get the Alexa service on other tablets, phones, and other devices.
That, along with the “Alexa Skills Kit” for developers, will, I think, mean that Alexa may become as important to people as answering machines were. You won’t want a home or to stay in a hotel that doesn’t have one (although you may have a portable version on your phone).
Lots of other items get shout-outs…and the
was mentioned during Q&A. Yes, the questioner was basically asking if it was dead and should be swept under the rug, but Amazon sidestepped that a little. I noticed that quite a few people bought them on Prime Day. It is my daily use phone, but it isn’t my favorite phone I’ve ever owned (that would be a Samsung). I’ve been trying to think about how they could give it a unique way to connect to the Echo sales. One possibility might be to do some kind of free tethering. I don’t know how that would work, but if the Echo could connect to the internet through the Fire Phone without the tethering plans you might need on other phones, that would make a difference.
The investors appear to be reacting positively.
Is there a conflict between happy investors and happy customers? After all, investors want a company to make money…and that money comes from the customers, who presumably want to hold on to it.
However…I think that many people have the mistaken idea that people never want to spend money.
I like giving money to people who I think deserve it. I want to reward them…that feels good. 🙂 In fact, I don’t like to feel like I’m taking advantage of somebody. If I got a great deal, but thought it would damage the company…maybe even make them go out of business, I wouldn’t want it.
Yes, there were some complaints about Prime Day on social media. Certainly, there are people who unhappy with Amazon…and it’s possible that percentage will grow.
There are also, though many people who are happy with Amazon.
This doesn’t mean that everything is smooth sailing ahead for Amazon forever. 🙂 That said, I think Amazon may now think they are going in the right direction (and it may be a direction they’ve planned for decades).
What do you think? As a customer, are you concerned that Amazon may raise prices to increase profitability? Or, do you think that you being happy is one of their assets? They didn’t call out Kindle Unlimited (at AmazonSmile: benefit a non-profit of your choice by shopping*) in the press release…what do you think that means? Is it possible this has been part of plan all along…are is that just part of the Amazon mythology? Feel free to tell me and my readers what you think by commenting on this post.
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* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. Shop ’til you help!
This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.