Why is Amazon on fire?

7th September 2012

Up to 3,000 temporary workers will also be taken on during the Christmas peak period, reports the Huffington Post.

It seems that rather than fretting about the economy, Amazon has decided to seize the day and storm ahead for future success. Another shining success, Dyson, was quoted in the Daily Telegraph as saying this is exactly what's needed.

He says: "In this economic climate it would be easy to shy away and save for a rainy day. But only with new technology and new ideas can we continue to grow regardless of the financial gloom."

Amazon managing director Christopher North says: "Our recruitment team has been exceptionally busy recently hiring hundreds of employees at the Hemel Hempstead fulfilment centre and they will certainly be busy over the next couple of years as we continue to expand to provide customers with the best possible experience."

Upping the ante

Amazon stepped up its fight as technology champion yesterday, unveiling a new set of Kindle Fire tablets including some with larger screens designed to compete with the iPad.

Reminiscent of pictures of Steve Jobs holding up the iPad, the Guardian has a picture of Amazon CEO Jeff Bezos holding a new front-lit Kindle Paperwhite 3G reading device.

Yet unlike Apple, Amazon's strategy has been to make the device as cheaply as possible and reap profits when people download content such as books and music onto them.

And with news that sales of e-books for the Kindle have overtaken those of printed books at online retailer Amazon for the first time earlier this year, this strategy seems to be working.

Amazon started selling e-books in the UK in August 2010, and said this year so far it has sold 114 Kindle titles for every 100 print books.

However, Amazon supplies a massive range of consumer goods and this is part of its appeal.

Number One brand

It was recently named the UK's favourite brand, topping a YouGov league table of most trusted business names – ahead of Marks & Spencer, reports This is Money.

Marks & Spencer, meanwhile, recently complained that its online sales platform, run by Amazon, is struggling to cope with demand – but cannot be replaced until 2014.

However, Amazon faces an uphill fight to wrestle share from Apple for the technology sector, as Apple controlled 68% of the global tablet market in the first quarter, according to research firm IDC. Apple is expected to launch a cheaper and smaller version of the iPad by the end of the year.

A positive outlook

Yet this news presents a different perspective to the prevailing view that the retail sector is on an inexorable slide – not all, and certainly some online retailers are thriving.

The high street is being shaken up by the boom of online shopping, so while there are obstacles in the way of success with a poor economic outlook it's not as bad as many might think.

Google chairman Eric Schmidt included Amazon in his "Gang of Four" companies that currently rule consumer technology last year. Apple, Google, and Facebook all made sense. However, many thought Amazon just a dot-com darling that sold a lot of books, sure, but hadn't exactly set the tech world on fire in at least a decade.

Yet the successful debut of the Kindle Fire, Amazon's first tablet, demonstrates just what a stealthy powerhouse CEO Jeff Bezos and his team have been building these past years.

This infographic from the Frugal Dad blog maps out some of the pillars of Amazon's rise.

The online retail giant has been building its media ties in order to compete with Apple and its rivals, adds the Guardian. Amazon announced a deal with film distributor EPIX, which counts recent blockbusters including The Avengers, The Hunger Games and Thor among its titles.

What do you think? Could Amazon continue to go from strength to strength, and would you invest in it?


More on Mindful Money:

Amazon's Robo-Pricing: The ghost in the machine

Will Amazon Lockers change the face of the high street?

Amazon closes UK libraries

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