Amazon's 2011: A Blueprint for the Next Decade of Growth

The following video is part of our "Motley Fool Conversations" series, in which Eric Bleeker, senior technology analyst, discusses topics around the investing world.

In this edition, Eric continues his review of how major tech companies performed in 2011. One company that had no shortage of storylines across the year was Amazon.com, which not only continued seeing strong growth and expansion of its e-commerce strength and cloud-computing momentum, but also took the wraps off its foray into the tablet market: the Kindle Fire.

What's interesting about Amazon is that the company saw earnings falling throughout 2011 despite huge sales increases. That's in large part because the company has been willing to aggressively price its Kindle e-readers and later Kindle Fire tablet to establish itself as a digital leader in addition to the leading online storefront. With Amazon now moving a million Kindles a week and reports of Amazon's production of Kindle Fires approaching 5 million units in the final quarter of 2011, that strategy looks to pay off, but not in a timeframe that might satisfy short-sighted investors on Wall Street.

Ultimately, 2011 looks to be the year where the blueprint for the next decade of Amazon's growth was laid out. It'll be:

  • A hybrid of Wal-Mart, a dominant retailer, but online …
  • Costco, through continuing tie-ins to Amazon Prime, which provides a recurring annual revenue stream …
  • And Apple: Through offering hardware that's vertically integrated with closed-in software.

Note that in the video, the Amazon shipment rate for Kindles as a whole device class is 1 million per week.

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Eric Bleeker owns no shares of the companies mentioned here. The Motley Fool owns shares of Costco Wholesale, Wal-Mart Stores, Amazon.com, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Costco Wholesale, Amazon.com, and Wal-Mart Stores, creating a bull call spread position in Apple, and creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 31, 2011, at 6:02 PM, BlueLens wrote:

    Please raise the camera to eye level. Thank you. Watching the video I feel like I'm sitting at a low desk. Like in 8th grade.

  • Report this Comment On January 01, 2012, at 12:20 PM, mhonarvar wrote:

    can you guys label these as "Amazon's 2011: A Blueprint for the Next Decade of Growth [video]" in the links?

  • Report this Comment On January 01, 2012, at 1:04 PM, wmumart wrote:

    I have no doubt the Amazon has a great strategy, plan, but there is one fundamental problem.

    Amazon did miss earnings last quarter by 73%, will miss the target this quarter and stock itself is badly damaged, is falling down at speed of light and there is no bottom at horizon.

    Yes I will invest in Amazon once it will go down to 10 or 12$, and will drop PE to 15.

    Just look at charts of MSFT, INTC, and many others when they did disappointed wall street few years back.

    In 2012 Amazon is going to be one of the biggest looser if not the biggest.

    They already lost more than 40 billion in market value in just 12 weeks.

    Wmumart

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