Is the Kindle Fire Not Catching Fire?

Coming on the heels of a surprisingly disappointing quarter in the eyes of Wall Street, some are questioning, or at least examining, the viability and popularity of Amazon’s (NASDAQ:AMZN) new tablet, the Kindle Fire.  This past quarter Amazon’s revenue was lower than its expenses – about $4.5 billion compared to $4.7 billion and its suspected that the Kindle Fire likely shares part of the blame for that. Right now, Amazon’s price of about $200 per tablet is actually $5 below it’s production price.  The company produces it as a loss leader against expected future sales of media – books, videos, and music – specifically for the device.

All told, many feel the strategy remains a sound one and that the disappointing quarter isn’t a big deal in the face of Amazon’s long term “seeding” plan.  Nevertheless, it’s interesting to note that Amazon failed to make any particular comments about the success of the Kindle Fire, only stating that the entire Kindle line (which includes the company’s popular Kindle e-reader) were up 177%

By point of comparison, Apple (NASDAQ:AAPL) was crowing upon the release of their colossal fourth quarter about the success of their tablet specific iPad line.  The tech company sold 15.4 million tablets during their record fourth quarter leading to overall profits of $13.06 billion – – the fourth largest quarterly profit in history. Amazon’s net income in the fourth quarter’, by comparison, was $177 million, a 58% decline from last year.

It should be noted that the comparison may be something of an apples to oranges one – no pun intended.  Amazon does not classify itself as a technology company as Apple does, but a retailer.  And yet, the lack of explicit stats about the Kindle Fire and in the face of Apple’s iPad success are leading many to suspect that Amazon’s seeding strategy with their tablet may not be bearing as much fruit as was first expected.

Here’s how these stocks closed today:

Amazon.com Inc. (NASDAQ:AMZN): AMZN shares recently traded at $179.46, down $14.98, or 7.7%. They have traded in a 52-week range of $160.59 to $246.71. Volume today was 21,329,522 shares versus a 3-month average volume of 6,010,420 shares. The company’s trailing P/E is 94.60, while trailing earnings are $1.90 per share.

Apple Inc. (NASDAQ:AAPL): AAPL shares recently traded at $456.19, down $0.29, or 0.06%. They have traded in a 52-week range of $310.50 to $458.24. Volume today was 9,623,018 shares versus a 3-month average volume of 12,748,300 shares. The company’s trailing P/E is 12.98, while trailing earnings are $35.14 per share.