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Amazon sees profits dive following Kindle Fire investment

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By John Glenday, Reporter

October 26, 2011 | 1 min read

Amazon has suffered a huge 73% slide in profits to £40m during the third quarter following its investment in a new budget tablet device.

Designed to tackle Apple’s iPad head on the computer has been soaking up the firms resources as it develops and markets the product – which is also being sold at low margins.

This is likely to impact on the crucial holiday period – as the firm continues to invest in the Fire.

Amazon is remaining upbeat about its future despite the reduction in profits, noting that its sales had grown by 44%

Jeff Bezos, the founder and chief executive of Amazon, said: "In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."

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