From ReadWriteWeb. More in the article.
Paulo Santos (who is short AMZN) has a great post on Seeking Alpha about the nasty secret hidden in Amazon’s otherwise-strong Q1 earnings. The reason Amazon’s razor-thin margins look just the teensiest bit better is that sales of the break-even Kindle have fallen off a cliff. Is e-ink doomed? We sure hope not.
Amazon never, ever talks about how many Kindles it sells. That’s what lots of tech companies do when their devices aren’t selling. So Santos did the sensible thing and looked for clues lower down the supply chain.
Sure enough, E Ink Holdings, the world’s biggest e-ink display manufacturer – with Amazon as its best customer – just reported its first quarterly loss in more than two years. Here’s chairman Scott Liu, quoted by the Taipei Times:
‘Our major customer was too optimistic about its sales in the fourth quarter of last year and ordered too much from us. That made the customer order almost nothing from us in the first quarter.’ What went wrong? Santos says the Kindle Fire cannibalized the e-ink Kindle sales. That’s possible, but it’s not proven. The timing is telling, though. Amazon has had to order few if any new e-ink screens since the Fire was introduced. Two great new e-ink Kindles also were introduced at the same time. That doesn’t smell good for the Kindle line.