Amazon’s Kindle business is one of the more intriguing businesses in technology.
Amazon reveals almost nothing about its sales or profits, so we have to rely on the estimates of analysts. Scott Devitt at Morgan Stanley did his best to break it down, and he believes the Kindle business is highly profitable for Amazon.
He believes 34 per cent of Amazon’s consolidated segment operating income is coming from the Kindle. In this chart, we break down where the money comes from. While Amazon loses money on each piece of hardware it sells, it makes money from advertising and digital media.
Amazon’s annual Kindle profit was $565 million last year, according to Devitt, so we’re not talking about an Apple-esque performance. He sees it jumping to $620 million this year.
Photo: Company Data; Morgan Stanley Research