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  • Self-Driving Vehicles to Make Up 75% of Sales by 2035

    Self-Driving Vehicles to Make Up 75% of Sales by 2035

    With congress now debating driverless car technology legislation and more automakers beginning to test their own driverless technology, it appears that autonomous vehicles are finally on their way to consumers. Unfortunately, legal barriers will stall the wide adoption of driverless cars for at leas another decade.

    Market research firm Navigant Research today predicted that autonomous vehicles will begin to make up a significant portion of the car market by the year 2025. In the decade following, the technology will become pervasive, eventually ending up on 75% of all vehicles sold in the year 2035. This report matches the time frame seen an IEEE report released in 2012 that predicted 75% of all vehicles on the road will be autonomous by the year 2040.

    “The introduction of satellite navigation systems has hastened the development of autonomous vehicle features, replacing the need for a massively expensive road infrastructure that was once thought to be a requirement for automated driving,” said David Alexander, senior research analyst at Navigant Research. “Already, automakers are incorporating intelligent onboard systems, such as self-parking, traffic jam assistance, and adaptive cruise control, in new and upcoming models.”

    Though regulatory hurdles still pose a threat to the advancing technology, some individual states such as Nevada and California are already allowing limited testing of autonomous vehicles on their roads. Navigant and other market watchers believe the inherent safety of taken control from human drivers will quickly drive adoption of the technology once early hurdles are cleared.

  • TV Sales to Drop For Second Year in a Row

    With 3D TV sets a failure and 4K TV content virtually nonexistent, TV manufacturers are offering nothing new to consumers this fall. Add in the fact that flat-panel and smart TV adoption has reached saturation levels in established markets, and manufacturers can look forward to a disappointing holiday quarter this year.

    Market research firm IHS today released its prediction for the worldwide TV market for the year 2013. The firm estimates that TV shipments will fall to an estimated 226.7 million units this year – a 5% drop from the 238.2 million units shipped in 2012. This would make 2013 the second straight year that TV shipments have declined, after a 7% drop in shipments last year over the 255.2 million TVs shipped in 2011.

    “A wide range of factors are conspiring to undermine television shipments in 2013, from economic weakness and market saturation of flat-panel TVs in mature regions, to plunging CRT sales in developing countries,” said Jusy Hong, senior analyst for consumer electronics & technology at IHS. “This is all adding up to a second consecutive year of decline for the television market.”

    It’s not only flat-panel LCD TV shipments that are expected to decline, though those popular models are expected to decline by at least 1%. IHS sees every type of TV in decline, including CRT and plasma displays. Sales of rear-projection TVs are expected to “dwindle to nothing,” according to the firm.

    In addition to mature markets becoming saturated, IHS is putting some of the TV decline on the continued global economic downturn. TV sales in Japan and Western Europe in particular have been declining for three years in a row. In addition, the disappearance of CRT TVs is causing consumers in emerging markets to think twice about more expensive flat-panel displays.

  • TV Sales Expected to Decline This Holiday Season

    HDTV sets are now ubiquitous throughout the U.S., with high quality, low cost sets available at retail locations across the country. While good for consumers, manufacturers are now scrambling to find a way to get consumers to spend money on TV hardware more often than once every handful of years.

    The jump to 4K could provide the needed boost for HDTV vendors, though 4K content is just beginning to appear, and consumers don’t seem to be as enthusiastic for the technology as they were for the jump to HD. Samsung’s scheme to update TV hardware with yearly upgrade kits is novel, though it too has not caught on with the wider consumer market.

    These difficulties could lead to a dismal holiday sales season for TV manufacturers. Market research firm IHS today released a report predicting that U.S. shipments of flat-panel TV sets will drop 7% from 2012 shipment levels during the second half of this year. Only 20.1 million flat-panel displays are expected to ship during the period. Shipments for the year are expected to drop 9% year-over-year to just 43.1 million units shipped.

    “Driven by holiday sales, the second half of the year is always critical for determining the fate of the U.S. TV market,” said Veronica Thayer, analyst for consumer electronics and technology at IHS. “However, even with TV brands offering lower prices during this year’s Black Friday than they did in 2012, sales in the second half will decelerate sharply. The U.S. television market continues to be stymied by the long-term slowdown in replacement and secondary purchases, with most U.S. homes already owning one or more flat-screen televisions.”

    The estimates corroborate recent rumors in the manufacturing industry. A recent DigiTimes report holds that worldwide TV shipments during the fourth quarter of 2013 will be down year-over-year. The report’s unnamed “industry sources” also state that demand for TVs in the U.S. and Europe have been “less-than-expected” this year.

  • Natural Gas Vehicle Sales to Rise in Coming Decade

    Electric cars are currently getting most of the attention paid to alternative fuel vehicles, and for good reason. The technology behind such vehicles is set to improve at a fast pace in the coming years, and the infrastructure to support them will also be built out quickly. However, another form of alternative energy is already selling more than electric vehicles, and is predicted to do so for at least the remainder of the decade.

    Market research firm Navigant Research today released a new report predicting that vehicles that run on natural gas will continue to become more popular in the coming years. The firm estimates that the number of natural gas vehicles (NVGs) sold in 2020 will be 3.3 million – a full 50% increase from the estimated 2.2 million natural gas vehicles that are to be sold this year.

    “Several forces are combining to drive sustained growth in the NGV market,” said Dave Hurst, principal research analyst at Navigant. “Vehicle manufacturers are facing increasingly strict fuel economy and emissions requirements that NGVs can help to meet, and many governments are offering purchase incentives to vehicle buyers. The most aggressive incentives, in several states within the United States, as well as in France and Italy, include tax rebates that cover much of the incremental purchase cost for these vehicles.”

    Navigant estimates that the lower price of natural gas will inevitably propel the industry forward. Natural gas compressed for use in vehicles is currently estimated to cost 41% less than than gasoline. However, the equipment used in natural gas vehicles requires a higher up-front cost, meaning that it may take years for natural gas vehicles to save drivers money on fuel.

  • Mercedes Benz: World’s Oldest Car Brand Still Beating Sales Records

    Mercedes Benz: World’s Oldest Car Brand Still Beating Sales Records

    What does Mercedes Benz have that other vehicle brands don’t?

    First, an unmatched automotive pedigree that began with the founding of the automobile itself. Second, a rare ability to be the leader at the cutting edge of design and technology that has made the Benz name synonymous with engineering excellence, German precision and vault like safety. Third, creating an aura of wealth, power and exclusivity around the three-pointed star so that it becomes the brand of choice among the world’s most notorious famous dictators, diplomats, and heads of state.

    So is there any doubt that the 127 year old brand reported the highest September sales in its US history with 24,697 units sold, an increase of 6.7% from the 23,156 vehicles sold in September 2012, while year-to-date sales hit a benchmark 215,056 units, up 12.2%.

    “We’re making history this month and not just in terms of our record sales pace,” said Steve Cannon, president and CEO of MBUSA. “September marked a recalibration moment for Mercedes-Benz as we began delivery of our new gateway, the CLA, to dealerships across the country. After just over a week on the market, this car sold more than 2,300 units. We’re confident the CLA will be a driving point of our success as we head toward another banner sales year.”

    The year-to-date (YTD) sales are being led by the C, E, M and GLK class. The sporty C-Class, which competes with BMW’s 3 -series, Audi’s A4 and Lexus’ IS, retained the top spot in terms of sales in the Benz line-up with 66,596 units sold YTD followed by the mid-size E-class which sold 46,006 units YTD. The third spot in sales was claimed by the MBUSA’s M-Class, which sold 29,400 units YTD.

    However, Benz’s German, Japanese and Indian rivals are giving it stiff competition amid a shrinking overall sales pie on account of poor American economic performance. Audi USA registered an YTD sales of 114,411 units, a 13.6% increase compared to 2012, whereas BMW brand registered 212,565 unit sales YTD, a 14% increase compared to 2012.

    Toyota’s Lexus brand also did well by clocking an 11.6% sales increase relative to 2012, at 190,760 units YTD. Jaguar, the Indian owned British brand also experienced a healthy YTD sales increase of 30.3% compared to last year, with 12,447 units sold, but in overall sales volume it still lags behind the Germans by an order of magnitude.

    The Germans have been pushing the sales of diesel models for many decades despite stubborn American reluctance towards diesel. Sales of Mercedes-Benz’s BlueTEC diesel models were 1,364 in September, up 193.3% from the 465 vehicles sold during the same period last year, but a mere drop in the ocean when compared to 11,765,811 new vehicles sold in the American market YTD.

    As the Federal Reserve distorts and eventually destroys the American market economy and prosperity with inflationary monetary policy, China and India are rapidly making giant strides toward becoming the largest and second largest car markets respectively, worldwide. Therefore it is all but certain, that what matters is the global market-share in a globalized world, not regional or country specific sales.

    [image from MBUSA google+ account, and expensivecars]

  • Rep. Bob Goodlatte To Move Forward With Online Sales Tax Bill [Report]

    In early May, the Senate voted in favor of the Marketplace Fairness Act. The legislation would require all online businesses to collect sales tax for every state they did business in regardless of their physical location. Now after three months, some members of the House are starting to stir in regards to the controversial legislation.

    Sources speaking to The Hill say that House Judiciary Chairman Bob Goodlatte will be releasing a set of principles regarding the Marketplace Fairness Act in the coming weeks. The document will outline what he feels the legislation should accomplish and in what ways the House can improve upon the Senate bill.

    If the above is true, it would be somewhat of a surprise. It was expected that most House Republicans would reject the Marketplace Fairness Act on account of it representing a new tax on businesses. Goodlatte, alongside most other House Republicans, have all signed the Americans for Tax Reform’s Taxpayer Protection Pledge. The pledge only calls for lawmakers to oppose federal income tax increases, but the rate at which the group has lobbied against the Marketplace Fairness Act will no doubt play a role in the upcoming House negotiations regarding the bill.

    Beyond that, the Marketplace Fairness Act has a rough road ahead of it simply due to the current climate in Washington. Both the Senate and the House are having to deal with everything from debt limit negotiations to the continued immigration debates. It will be hard for anybody in the House to find time to take up the matter of online sales tax legislation, but the National Retail Federation, a lobbying group that has strongly supported the legislation, isn’t giving up hope.

    David French, the head lobbyist for the NRF, told The Hill that passage of the Marketplace Fairness Act is “not necessarily a question of it but when.” He says that the growing size of online retail is going to necessitate Congress to act sooner or later. Once it does, the Obama administration will welcome it with open arms. Small businesses can only hope that they get a say before it reaches that point.

    [Image: Congressman Bob Goodlatte/Facebook]

  • Electric Car Sales Rising in the U.S.

    As the price and reliability of electric cars improve, manufacturers are now seeing adoption rates of the technology pick up. The U.S. in particular is seeing sales of plug-in electric vehicles (PEVs) soar, according to a new report from market research firm Navigant Research.

    The firm’s report predicts that PEV sales will grow 18.6% annually in the years between now and 2022. Sales are expected to be particularly high in a handful of states, including California, Washington, Florida, and New York. By percentage, Hawaii and Oregon are also expected to enjoy high PEV sales.

    “The market for plug-in electric vehicles is beginning to mature now that the most popular models, the Chevy Volt and Nissan Leaf, are available in all North American markets, and Ford, Mercedes Benz, Toyota, Mitsubishi, Honda, Fiat, and Tesla are all ramping up production of competitive vehicles,” said David Alexander, senior research analyst at Navigant. “BMW and Volkswagen will soon add to the choices, and greater availability of charging infrastructure is supporting this growth. The majority of PEV sales will remain close to major cities on the east and west coasts.

    Tesla Motors in particular has seen explosive growth over the past year. The company recently announced that its Model S electric car outsold luxury car brands such as Porsche, Lincoln, and Jaguar in the state of California. It also this summer paid off a massive government loan years before it was due.

  • Half of U.S. Car Sales to be Driverless by 2032

    Half of U.S. Car Sales to be Driverless by 2032

    Google and car manufacturers are continuing to test new self-driving car technologies. At the same time, lawmakers are struggling to regulate the technology while reassuring the public that vehicles will actually be safer without humans behind the wheel. There won’t be much time to get ahead of this technology, though, if new predictions are accurate.

    Analyst firm ABI Research today predicted that more than 10 million “robotic” vehicles will ship in North America in the year 2032. That would represent around half of the vehicles shipping in North America. Also, the first commercial self-driving cars will show up in the U.S. starting one decade from now.

    “While the technological feasibility of autonomous vehicles is being demonstrated by Google, Audi, Volvo, Bosch, and Continental, obstacles such as high costs and lack of legislation remain,” said Dominique Bonte, practice director at ABI. “On the other hand, the benefits of autonomous vehicles in terms of safety, cost savings, efficiency, and positive impact on the economy, are driving research and development efforts globally. With ADAS-type assistance features already being implemented on a wide scale, the next phase of autonomous co-pilot type vehicles will materialize in this decade. Fully autonomous, self-driving, robotic vehicles will appear 10 years from now.”

    ABI’s new report on autonomous vehicles predicts that automation will be implemented in vehicles gradually over the next decade. It also states that, in addition to the new legislation needed to regulate driverless cars, lawmakers will have to address current safety legislation (such as texting-while-driving bans) that will be made obsolete by the technology.

    (Image courtesy Steve Jurvetson/Wikimedia Commons)

  • Tech Sales Techniques Need to Change, Say Analysts

    Tech Sales Techniques Need to Change, Say Analysts

    As technology evolves at an ever more-rapid pace, companies are struggling to keep up with changing markets. The tablet market is only a few years old and still growing, but companies are already preparing to release smart watches and other wearable computer products, convinced that they will be the next big tech market segment.

    Though the technology innovation at companies will have to keep pace, marketing and sales will also have to evolve rapidly, at least according to one analyst firm. Gartner today predicted that forward-thinking sales models could end up being even more important than unique tech products.

    “As technology has continued its unprecedented advance in recent years, the sales models used by providers to bring technology products to market have failed to keep up,” said Tiffani Bova, an analyst and vice president at Gartner. “The greatest innovation challenge for providers today may be in finding the means to reinvent the sales organization and go-to-market model to meet new market demands, while at the same time continuing to protect and defend existing customers and deliver net new revenue.”

    Garter admits that it is difficult for tech companies in particular to be flexible with their sales models while still safe-guarding current sales and customers. The firm also predicts that this same inflexibility will lead to many large tech companies being left behind by newer business and sales models. The new models will be shaped by customers who now have access to more information than ever before. Gartner suggests that companies will have to bring their products to where customers are, rather than expect customers to flock to the few places their products are being offered.

    “The existing ways of selling, based on specific segments, high-touch, often face-to-face sales, with a select few channels and heavy investments in lead generation marketing, are beginning to be less effective as people’s buying behavior changes, and the expectations of IT shift,” said Ms. Bova. “The key to moving forward is to take a customer-centered approach and adopt sales models that support customers’ new buying processes, rather than fight against them.”

  • Video Game Console Sales Expected to be Lower This Generation

    The announcements this year of Sony’s PlayStation 4 and Microsoft’s Xbox One have kicked off a new generation of console wars. While the excitement surrounding these new consoles is palpable, continued slow sales for Nintendo’s new Wii U console could be a warning that expectations for the 8th generation of video game consoles are a bit too high.

    Today ABI Research, a technology analyst firm, released predictions for console shipments over the next few years. It predicts PlayStation 4, Xbox One, and Wii U console sales to reach only 133 million units over the next five years – 7 million units less than were sold during the first five years of the previous generation.

    The reason for the lowered prediction is similar to those brought up often in discussions about the uncertain future of console gaming itself. ABI cites the rise of mobile gaming, and even casual gaming devices such as the Ouya as inexpensive competitors to the higher-priced dedicated consoles. Even a possible end to the Chinese ban on consoles isn’t predicted to raise shipments of the new consoles very much.

    “With many of the casual gaming segment embracing mobile devices for gaming, without a shift in strategy and pricing the Wii U will likely fail to match the success of the Wii which will impact future console shipments,” said Michael Inouye, senior analyst at ABI. “If China decides to lift its ban on consoles, however, in the short term this could boost future shipments of 7th generation game consoles while minimally altering the 8th generation.”

    ABI also isn’t too impressed with Microsoft’s positioning of the Xbox One as an all-in-one media device for the living room. The analyst firm pointed out that many set-top boxes under $99 offer much of the same functionality.

    “The future prospects of gaming platforms depends in equal measure on compelling games and pricing falling within household reach for discretionary/gift spending,” said Sam Rosen, practice director at ABI. “Without solid titles and first party franchises platforms will have a difficult time finding traction – streaming media is not enough when low-cost smart STBs are readily available. While we don’t anticipate a drop-off in game console households, barring significant changes to less developed console markets in Asia and Latin America there isn’t a great deal of growth opportunity beyond the current installed base.”

  • Salesforce To Buy ExactTarget For $2.5 Billion

    Salesforce To Buy ExactTarget For $2.5 Billion

    Salesforce announced on Tuesday that it has entered an agreement in which it will acquire ExactTarget for about $2.5 billion. Salesforce will commence a tender offer for all outstanding shares of ExactTarget at $33.75 per share, in cash.

    Salesforce says the acquisition will further its CRM platform goals and help it create a “world-class” marketing platform across email, social, mobile and the web.

    Salesforce CEO Marc Benioff said, “The CMO is expected to spend more on technology than the CIO by 2017. The addition of ExactTarget makes Salesforce the starting place for every company and puts salesforce.com in the pole position to capture this opportunity.”

    “ExactTarget’s mission is to revolutionize how businesses connect with their consumers using data-driven digital marketing across all channels,” said Scott Dorsey, ExactTarget chairman, CEO and co-founder. “Salesforce.com’s tremendous strength in social marketing, along with its leadership position in sales and service, not only will accelerate this vision, but also provide our customers with a powerful, integrated CRM platform to transform their end-to-end customer experience.”

    The acquisition is expected to increase Salesforce’s total revenue by $120 to $125 million. ExactTarget is used by over 6,000 companies, including Coca-Cola, Gap and Nike.

    The deal has been unanimously approved by the Boards of Directors of both Salesforce and ExactTarget.

  • Will Small Businesses Suffer If Forced To Collect Online Sales Tax?

    One of the most controversial pieces of legislation currently making its way through the Senate is the Marketplace Fairness Act. In essence, it would allow states to collect taxes from online purchases even if the online store doesn’t have a physical presence in the state. Brick-and-mortar stores claim the bill levels the playing field with online retailers while opponents say it would put undue regulations on online businesses while making the tax code even more cumbersome. Guess which side the White House agrees with.

    The Hill reports that the White House has formally announced its support for the Marketplace Fairness Act. The newfound endorsement was a key factor in the Senate voting in favor of the bill during a procedural vote on Monday evening.

    Do you support an online sales tax? Do you think small online businesses have anything to fear? Let us know in the comments.

    The idea of an online sales tax is nothing new. Retail stores, represented by the National Retail Federation, have been pushing for an online sales tax bill for years after the Supreme Court ruled in Quill Corp v. North Dakota that a state could not levy sales tax against a company if it had no physical presence in the state. Numerous online retailers use this to get around sales tax, and retail stores say this gives them an unfair advantage.

    The White House completely agrees. In a statement to the press on Monday, White House press secretary Jay Carney said the bill would level the playing field for brick-and-mortar stores and online retailers:

    “This administration has carefully considered the legislation, and our team has met with a broad array of people on the issue. And we have heard overwhelmingly from governors, mayors and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness.”

    The Nation Retail Federation isn’t the only group pushing for the Senate to pass the Marketplace Fairness Act. Governors around the country, including Chris Christie of New Jersey and Rick Snyder of Michigan, have voiced their support for the bill. States are hurting for revenue, and they feel that a national mandate on sales tax will bring billions of revenue back to the states. Carney echoed the governors by saying that the potential tax revenue would help states fund “K-12 education, police and fire protection, access to affordable health care, and funding for roads and bridges.”

    Even if the bill is able to pass the Senate during a final vote later this week, it faces plenty of opposition. The Republican-controlled House is just one of the many challenges the Marketplace Fairness Act faces as it progresses through the legislature. Obviously online businesses are coming out against it. Ebay has been especially hostile towards the legislation, and has even started recruiting its sellers to protest the bill.

    The common complaint from Ebay and other businesses opposed is that the bill would put undue burdens on online retailers. The current tax system has created a symbiotic relationship between online companies and the states. The states attract online companies to set up a physical presence in a state through a number of perks while the company brings tax revenue and jobs to the state in question. A universal online sales tax destroys that relationship by making online companies collect sales taxes for states that they receive no benefit from.

    The current legislation offers sales exemptions to online businesses that make less than $1 million annually. Ebay is currently lobbying Senators to add an amendment that would up this exemption to $10 million.

    One company that’s already benefiting from that symbiotic relationship has come out strongly in favor of the bill though. Amazon, which has a number of distribution centers across the country, says that it favors the bill because it creates a unified national framework for tax collection.

    Despite the Senate’s overwhelming support of the bill, TechDirt points out that Sen. Ron Wyden has come out strongly against it saying that it negatively impacts innovation.

    Another group standing in the bill’s way is Wall Street as it argues that the legislation, as it stands, could negatively affect financial transactions. One group in particular, the Financial Services Roundtable, says that a sales tax on financial transactions would hurt just about everyone:

    “A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed.”

    Do you agree with those in favor of the bill? Or the opposition? Let us know in the comments.

    It should be noted that the Marketplace Fairness Act isn’t a done deal in the Senate. Monday’s vote was only procedural. Now the Senate will get to work on adding amendments to the bill with a final vote scheduled for Thursday or Friday.

    Unless something disastrous happens, the bill will probably pass the Senate without much of a fight. A glowing endorsement from the White House has made sure of that.

    During the debate in the Senate and the House, you’re likely to see the following argument – Do we even need an online sales tax bill? Is there any real reason to throw a bone to the retail businesses that implement stupid strategies like a $5 window shopping fee.

    One compelling argument is that retail stores should find ways to better compete with online businesses. The retail store still has a few advantages over online businesses, but are they really capitalizing on those advantages?

    At this point, it’s too early to tell exactly what kind of damage, if any, the Marketplace Fairness Act would cause. It could possibly do nothing, but some are right to fear that it would legitimately hurt the operations of online retailers.

    Do you think that retail stores need a level playing field? Will the Marketplace Fairness Act negatively affect small online businesses? Let us know in the comments.

  • Amazon Sales Up 22% To $16.07 Billion For Q1, Profit Down

    Amazon reported its Q1 earnings today with sales up 22% to $16.07 billion.

    Operating cash flow was up 39% year-over-year to $4.25 billion for the trailing twelve months. Free cash flow was down 85% to $177 million for the trailing twelve months. This includes purchases of corporate office space and property in Seattle. Operating income was down 6% to $181 million in the first quarter, compared with $192 million in first quarter of 2012. Net income decreased 37% to $82 million in the quarter.

    Amazon is excited about its original content business moving forward.

    CEO Jeff Bezos said, “Amazon Studios is working on a new way to greenlight TV shows. The pilots are out in the open where everyone can have a say. I have my personal picks and so do members of the Amazon Studios team, but the exciting thing about our approach is that our opinions don’t matter. Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members.”

    There is also talk of a pending Amazon ad network that would take on the likes of Google and Facebook, not to mention set-top boxes.

    Stock is up in after hours trading.

    Here’s the release in its entirety:

    SEATTLE–(BUSINESS WIRE)–Apr. 25, 2013– Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2013.

    Operating cash flow increased 39% to $4.25 billion for the trailing twelve months, compared with $3.05 billion for the trailing twelve months ended March 31, 2012. Free cash flow decreased 85% to $177 million for the trailing twelve months, compared with $1.15 billion for the trailing twelve months ended March 31, 2012. Free cash flow for the trailing twelve months ended March 31, 2013includes fourth quarter 2012 cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

    Common shares outstanding plus shares underlying stock-based awards totaled 471 million on March 31, 2013, compared with 464 million one year ago.

    Net sales increased 22% to $16.07 billion in the first quarter, compared with $13.18 billion in first quarter 2012. Excluding the $302 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 24% compared with first quarter 2012.

    Operating income decreased 6% to $181 million in the first quarter, compared with $192 million in first quarter 2012. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $12 million.

    Net income decreased 37% to $82 million in the first quarter, or $0.18 per diluted share, compared with $130 million, or $0.28 per diluted share, in first quarter 2012.

    “Amazon Studios is working on a new way to greenlight TV shows. The pilots are out in the open where everyone can have a say,” saidJeff Bezos, founder and CEO of Amazon.com. “I have my personal picks and so do members of the Amazon Studios team, but the exciting thing about our approach is that our opinions don’t matter. Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members.”

    Highlights

    • Amazon.com expanded selection for Prime Instant Video, announcing new licensing agreements with A+E Networks, CBS Corporation, FX, PBS Distribution and Scripps Networks Interactive, bringing exclusive access to popular television series such as Downton Abbey, Justified and Under the Dome as well as shows from HGTV, DIY Network, Food Network, Cooking Channel and Travel Channel. Prime Instant Video now includes more than 38,000 movies and TV episodes that are available for Prime members to watch at no additional charge.
    • Amazon Studios, the original film and series production arm of Amazon.com, debuted 14 original comedy and kids pilots. The pilots, which feature stars such as John Goodman, Jeffrey Tambor and Bebe Neuwirth, are available exclusively atwww.amazonoriginals.com and on the Amazon Instant Video app for Kindle Fire HD, Kindle Fire, iPad, iPhone, iPod touch, Roku, Xbox 360, PlayStation 3, Wii and Wii U, as well as hundreds of other connected devices. Viewer feedback will help determine which pilots Amazon Studios will produce into full series.
    • Amazon expanded the popular Kindle Fire feature “X-Ray for Movies” to TV shows, bringing the power of IMDb directly to the most popular TV shows on Kindle Fire. With a single tap viewers can discover the names of actors and what they’ve been in, without even leaving the TV show.
    • Kindle Owners’ Lending Library has grown to over 300,000 books available to borrow for free as frequently as a book a month, including many titles exclusive to Amazon.
    • Amazon announced the launch of the Amazon MP3 store optimized specifically for Safari browser. For the first time ever, iPhone and iPod touch users can discover and buy digital music from Amazon’s 22 million song catalog. Amazon also announced its Cloud Player app for iPad and iPad mini, enabling customers to play or download music stored in Cloud Player to their device, play music that is already stored on their device, and manage or create playlists.
    • Amazon announced it has extended its popular AutoRip services to vinyl records. AutoRip provides customers with free MP3 versions of CDs and vinyl records they purchase from Amazon. Additionally, customers who have purchased AutoRip CDs or vinyl records at any time since Amazon first opened its Music Store in 1998 will find MP3 versions of those albums in their Cloud Player libraries – also automatically for free.
    • Amazon announced the launch of Kindle Fire HD 8.9” — the large-screen version of its best-selling tablet —for the U.K.,Germany, France, Italy, Spain and Japan. With the expansion of Kindle Fire HD 8.9” to Europe and Japan, Amazon also announced a lower price on Kindle Fire HD 8.9” in the U.S., with the Wi-Fi version starting at $269 and the 4G version starting at$399.
    • Amazon Publishing, the publishing arm of Amazon.com, announced that it will start paying authors their royalties monthly, 60 days in arrears — allowing authors to receive payment more frequently than the twice-a-year industry standard.
    • Amazon acquired Goodreads, a leading site for readers and book recommendations that helps people find and share books they love. Goodreads members can discover new books by seeing what their friends are reading or by using the Goodreads Book Recommendation Engine; share ratings and recommendations; track what they have read, and list what they want to read.
    • Amazon Web Services (AWS) announced the launch of Amazon Redshift, a fast and powerful, fully managed, petabyte-scale data warehouse service in the cloud for a fraction of the cost of a traditional data warehouse.
    • AWS launched AWS OpsWorks, an application management solution for the complete lifecycle of complex applications, including resource provisioning, configuration management, deployment, monitoring, and access control.
    • AWS announced Amazon Elastic Transcoder, a highly scalable service for transcoding video files between different digital media formats. Amazon Elastic Transcoder manages all aspects of the transcoding process transparently and automatically, providing scalability and performance by leveraging AWS services.
    • AWS announced AWS CloudHSM, a new service enabling customers to increase data security and meet compliance requirements by using dedicated Hardware Security Module (HSM) appliances within the AWS Cloud. The CloudHSM service allows customers to securely generate, store and manage cryptographic keys used for data encryption in a way that keys are accessible only by the customer.
    • AWS has lowered prices 31 times since it launched in 2006, including 7 price reductions so far in 2013.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of April 25, 2013. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

    Second Quarter 2013 Guidance

    • Net sales are expected to be between $14.5 billion and $16.2 billion, or to grow between 13% and 26% compared with second quarter 2012.
    • Operating income (loss) is expected to be between $(340) million and $10 million, compared to $107 million in the comparable prior year period.
    • This guidance includes approximately $340 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

    A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months atwww.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

    These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains, and develops commercial agreements, acquisitions, and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services, and technologies, system interruptions, government regulation and taxation, payments, and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

    Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

    About Amazon.com

    Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. Kindle Paperwhite is the most-advanced e-reader ever constructed with 62% more pixels and 25% increased contrast, a patented built-in front light for reading in all lighting conditions, extra-long battery life, and a thin and light design. The new latest generation Kindle, the lightest and smallest Kindle, now features new, improved fonts and faster page turns. Kindle Fire HD features a stunning custom high-definition display, exclusive Dolby audio with dual stereo speakers, high-end, laptop-grade Wi-Fi with dual-band support, dual-antennas and MIMO for faster streaming and downloads, enough storage for HD content, and the latest generation processor and graphics engine—and it is available in two display sizes—7” and 8.9”. The large-screen Kindle Fire HD is also available with 4G wireless, and comes with a groundbreaking $49.99 introductory 4G LTE data package. The all-new Kindle Fire features a 20% faster processor, 40% faster performance, twice the memory, and longer battery life.

    Amazon and its affiliates operate websites…. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    (unaudited)
    Three Months Ended Twelve Months Ended
    March 31, March 31,
    2013 2012 2013 2012
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 8,084 $ 5,269 $ 2,288 $ 2,641
    OPERATING ACTIVITIES:
    Net income (loss) 82 130 (87 ) 561
    Adjustments to reconcile net income (loss) to net cash from operating activities:
    Depreciation of property and equipment, including internal-use software and website development, and other amortization 700 457 2,402 1,338
    Stock-based compensation 229 160 901 605
    Other operating expense (income), net 31 46 139 168
    Losses (gains) on sales of marketable securities, net – (2 ) (7 ) (8 )
    Other expense (income), net 68 15 306 (78 )
    Deferred income taxes (80 ) (38 ) (307 ) 83
    Excess tax benefits from stock-based compensation – (40 ) (390 ) (56 )
    Changes in operating assets and liabilities:
    Inventories 535 747 (1,211 ) (1,374 )
    Accounts receivable, net and other 729 746 (877 ) (479 )
    Accounts payable (4,187 ) (4,258 ) 2,141 1,388
    Accrued expenses and other (703 ) (529 ) 864 721
    Additions to unearned revenue 684 397 2,083 1,252
    Amortization of previously unearned revenue (460 ) (269 ) (1,712 ) (1,070 )
    Net cash provided by (used in) operating activities (2,372 ) (2,438 ) 4,245 3,051
    INVESTING ACTIVITIES:
    Purchases of property and equipment, including internal-use software and website development (670 ) (386 ) (4,068 ) (1,899 )
    Acquisitions, net of cash acquired, and other (103 ) (50 ) (798 ) (615 )
    Sales and maturities of marketable securities and other investments 599 1,738 3,098 6,641
    Purchases of marketable securities and other investments (776 ) (852 ) (3,227 ) (5,997 )
    Net cash provided by (used in) investing activities (950 ) 450 (4,995 ) (1,870 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation – 40 390 56
    Common stock repurchased – (960 ) – (1,237 )
    Proceeds from long-term debt and other 25 68 3,319 154
    Repayments of long-term debt, capital lease, and finance lease obligations (182 ) (153 ) (603 ) (483 )
    Net cash provided by (used in) financing activities (157 ) (1,005 ) 3,106 (1,510 )
    Foreign-currency effect on cash and cash equivalents (124 ) 12 (163 ) (24 )
    Net increase (decrease) in cash and cash equivalents (3,603 ) (2,981 ) 2,193 (353 )
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,481 $ 2,288 $ 4,481 $ 2,288
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long-term debt $ 13 $ 6 $ 37 $ 17
    Cash paid for income taxes (net of refunds) 86 19 179 45
    Property and equipment acquired under capital leases 340 149 993 721
    Property and equipment acquired under build-to-suit leases 150 17 163 207
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    (unaudited)
    Three Months Ended
    March 31,
    2013 2012
    Net product sales $ 13,271 $ 11,249
    Net services sales 2,799 1,936
    Total net sales 16,070 13,185
    Operating expenses (1):
    Cost of sales 11,801 10,027
    Fulfillment 1,796 1,295
    Marketing 632 480
    Technology and content 1,383 945
    General and administrative 246 200
    Other operating expense (income), net 31 46
    Total operating expenses 15,889 12,993
    Income from operations 181 192
    Interest income 10 12
    Interest expense (33 ) (21 )
    Other income (expense), net (77 ) (99 )
    Total non-operating income (expense) (100 ) (108 )
    Income before income taxes 81 84
    Benefit (provision) for income taxes 18 (43 )
    Equity-method investment activity, net of tax (17 ) 89
    Net income $ 82 $ 130
    Basic earnings per share $ 0.18 $ 0.29
    Diluted earnings per share $ 0.18 $ 0.28
    Weighted average shares used in computation of earnings per share:
    Basic 455 453
    Diluted 463 460
    (1) Includes stock-based compensation as follows:
    Fulfillment $ 61 $ 37
    Marketing 16 12
    Technology and content 120 85
    General and administrative 32 26
    AMAZON.COM, INC.
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (in millions)
    (unaudited)
    Three Months Ended
    March 31,
    2013 2012
    Net income $ 82 $ 130
    Other comprehensive income (loss):
    Foreign currency translation adjustments, net of tax of $(9) and $(38) (78 ) 137
    Net change in unrealized gains on available-for-sale securities:
    Unrealized gains (losses), net of tax of $1 and $(3) (2 ) 7
    Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax effect of $0 and $1 – (2 )
    Net unrealized gains (losses) on available-for-sale securities (2 ) 5
    Total other comprehensive income (loss) (80 ) 142
    Comprehensive income $ 2 $ 272
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    (unaudited)
    Three Months Ended
    March 31,
    2013 2012
    North America
    Net sales $ 9,391 $ 7,427
    Segment operating expenses (1) 8,934 7,078
    Segment operating income $ 457 $ 349
    International
    Net sales $ 6,679 $ 5,758
    Segment operating expenses (1) 6,695 5,709
    Segment operating income (loss) $ (16 ) $ 49
    Consolidated
    Net sales $ 16,070 $ 13,185
    Segment operating expenses (1) 15,629 12,787
    Segment operating income 441 398
    Stock-based compensation (229 ) (160 )
    Other operating income (expense), net (31 ) (46 )
    Income from operations 181 192
    Total non-operating income (expense) (100 ) (108 )
    Benefit (provision) for income taxes 18 (43 )
    Equity-method investment activity, net of tax (17 ) 89
    Net income $ 82 $ 130
    Segment Highlights:
    Y/Y net sales growth:
    North America 26 % 36 %
    International 16 31
    Consolidated 22 34
    Y/Y segment operating income growth (decline):
    North America 31 % 20 %
    International (133 ) (72 )
    Consolidated 11 (15 )
    Net sales mix:
    North America 58 % 56 %
    International 42 44
    100 % 100 %
    (1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    (unaudited)
    Three Months Ended
    March 31,
    2013 2012
    North America
    Media $ 2,513 $ 2,197
    Electronics and other general merchandise 6,128 4,772
    Other (1) 750 458
    Total North America $ 9,391 $ 7,427
    International
    Media $ 2,545 $ 2,513
    Electronics and other general merchandise 4,086 3,203
    Other (1) 48 42
    Total International $ 6,679 $ 5,758
    Consolidated
    Media $ 5,058 $ 4,710
    Electronics and other general merchandise 10,214 7,975
    Other (1) 798 500
    Total consolidated $ 16,070 $ 13,185
    Y/Y Net Sales Growth:
    North America:
    Media 14 % 17 %
    Electronics and other general merchandise 28 44
    Other 64 66
    Total North America 26 36
    International:
    Media 1 % 21 %
    Electronics and other general merchandise 28 40
    Other 14 24
    Total International 16 31
    Consolidated:
    Media 7 % 19 %
    Electronics and other general merchandise 28 43
    Other 59 61
    Total consolidated 22 34
    Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
    International:
    Media 7 % 22 %
    Electronics and other general merchandise 32 42
    Other 18 26
    Total International 21 32
    Consolidated:
    Media 10 % 19 %
    Electronics and other general merchandise 30 43
    Other 60 61
    Total consolidated 24 34
    Consolidated Net Sales Mix:
    Media 31 % 36 %
    Electronics and other general merchandise 64 60
    Other 5 4
    100 % 100 %
    (1) Includes sales from non-retail activities, such as AWS in the North America segment, advertising services, and our co-branded credit card agreements in both segments.
    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    March 31, December 31,
    2013 2012
    ASSETS (unaudited)
    Current assets:
    Cash and cash equivalents $ 4,481 $ 8,084
    Marketable securities 3,414 3,364
    Inventories 5,395 6,031
    Accounts receivable, net and other 2,516 3,364
    Deferred tax assets 507 453
    Total current assets 16,313 21,296
    Property and equipment, net 7,674 7,060
    Deferred tax assets 123 123
    Goodwill 2,535 2,552
    Other assets 1,732 1,524
    Total assets $ 28,377 $ 32,555
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 8,916 $ 13,318
    Accrued expenses and other 5,416 5,684
    Total current liabilities 14,332 19,002
    Long-term debt 3,040 3,084
    Other long-term liabilities 2,573 2,277
    Commitments and contingencies
    Stockholders’ equity:
    Preferred stock, $0.01 par value:
    Authorized shares — 500
    Issued and outstanding shares — none – –
    Common stock, $0.01 par value:
    Authorized shares — 5,000
    Issued shares — 479 and 478
    Outstanding shares — 455 and 454 5 5
    Treasury stock, at cost (1,837 ) (1,837 )
    Additional paid-in capital 8,585 8,347
    Accumulated other comprehensive loss (319 ) (239 )
    Retained earnings 1,998 1,916
    Total stockholders’ equity 8,432 8,192
    Total liabilities and stockholders’ equity $ 28,377 $ 32,555
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)
    Y/Y %
    Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 3,051 $ 3,222 $ 3,368 $ 4,180 $ 4,245 39 %
    Purchases of property and equipment (incl. internal-use software & website development) — TTM $ 1,899 $ 2,123 $ 2,310 $ 3,785 $ 4,068 114 %
    Free cash flow (operating cash flow less purchases of property and equipment) — TTM $ 1,152 $ 1,099 $ 1,058 $ 395 $ 177 (85 %)
    Free cash flow — TTM Y/Y growth (decline) (39 %) (40 %) (31 %) (81 %) (85 %) N/A
    Invested capital (1) $ 10,006 $ 10,250 $ 10,392 $ 11,181 $ 12,019 20 %
    Return on invested capital (2) 12 % 11 % 10 % 4 % 1 % N/A
    Common shares and stock-based awards outstanding 464 468 469 470 471 2 %
    Common shares outstanding 450 452 453 454 455 1 %
    Stock-based awards outstanding 13 16 16 16 16 17 %
    Stock-based awards outstanding — % of common shares outstanding 2.9 % 3.6 % 3.6 % 3.5 % 3.4 % N/A
    Results of Operations
    Worldwide (WW) net sales $ 13,185 $ 12,834 $ 13,806 $ 21,268 $ 16,070 22 %
    WW net sales — Y/Y growth, excluding F/X 34 % 32 % 30 % 23 % 24 % N/A
    WW net sales — TTM $ 51,404 $ 54,325 $ 57,256 $ 61,093 $ 63,978 24 %
    WW net sales — TTM Y/Y growth, excluding F/X 37 % 35 % 33 % 29 % 27 % N/A
    Operating income (loss) $ 192 $ 107 $ (28 ) $ 405 $ 181 (6 %)
    Operating income — Y/Y growth (decline), excluding F/X (38 %) (34 %) (137 %) 59 % 1 % N/A
    Operating margin — % of WW net sales 1.5 % 0.8 % (0.2 %) 1.9 % 1.1 % N/A
    Operating income — TTM $ 732 $ 637 $ 531 $ 676 $ 665 (9 %)
    Operating income — TTM Y/Y growth (decline), excluding F/X (50 %) (50 %) (48 %) (15 %) (6 %) N/A
    Operating margin — TTM % of WW net sales 1.4 % 1.2 % 0.9 % 1.1 % 1.0 % N/A
    Net income (loss) $ 130 $ 7 $ (274 ) $ 97 $ 82 (37 %)
    Net income (loss) per diluted share $ 0.28 $ 0.01 $ (0.60 ) $ 0.21 $ 0.18 (37 %)
    Net income (loss) — TTM $ 561 $ 377 $ 40 $ (39 ) $ (87 ) (116 %)
    Net income (loss) per diluted share — TTM $ 1.22 $ 0.82 $ 0.09 $ (0.09 ) $ (0.19 ) (116 %)
    Segments
    North America Segment:
    Net sales $ 7,427 $ 7,326 $ 7,884 $ 12,175 $ 9,391 26 %
    Net sales — Y/Y growth, excluding F/X 36 % 36 % 33 % 23 % 26 % N/A
    Net sales — TTM $ 28,667 $ 30,587 $ 32,540 $ 34,813 $ 36,777 28 %
    Operating income $ 349 $ 344 $ 291 $ 608 $ 457 31 %
    Operating margin — % of North America net sales 4.7 % 4.7 % 3.7 % 5.0 % 4.9 % N/A
    Operating income — TTM $ 991 $ 1,120 $ 1,268 $ 1,592 $ 1,700 72 %
    Operating income — TTM Y/Y growth, excluding F/X 2 % 14 % 34 % 71 % 72 % N/A
    Operating margin — TTM % of North America net sales 3.5 % 3.7 % 3.9 % 4.6 % 4.6 % N/A
    International Segment:
    Net sales $ 5,758 $ 5,508 $ 5,922 $ 9,093 $ 6,679 16 %
    Net sales — Y/Y growth, excluding F/X 32 % 28 % 27 % 23 % 21 % N/A
    Net sales — TTM $ 22,737 $ 23,738 $ 24,716 $ 26,280 $ 27,201 20 %
    Net sales — TTM % of WW net sales 44 % 44 % 43 % 43 % 43 % N/A
    Operating income (loss) $ 49 $ 16 $ (59 ) $ 70 $ (16 ) (133 %)
    Operating margin — % of International net sales 0.9 % 0.3 % (1.0 %) 0.8 % (0.2 %) N/A
    Operating income — TTM $ 515 $ 359 $ 183 $ 76 $ 11 (98 %)
    Operating income — TTM Y/Y growth (decline), excluding F/X (49 %) (57 %) (68 %) (77 %) (83 %) N/A
    Operating margin — TTM % of International net sales 2.3 % 1.5 % 0.7 % 0.3 % 0.0 % N/A
    Consolidated Segments:
    Operating expenses (3) $ 12,787 $ 12,474 $ 13,574 $ 20,590 $ 15,629 22 %
    Operating expenses — TTM (3) $ 49,899 $ 52,846 $ 55,805 $ 59,425 $ 62,267 25 %
    Operating income $ 398 $ 360 $ 232 $ 678 $ 441 11 %
    Operating margin — % of Consolidated sales 3.0 % 2.8 % 1.7 % 3.2 % 2.7 % N/A
    Operating income — TTM $ 1,505 $ 1,480 $ 1,451 $ 1,668 $ 1,711 14 %
    Operating income — TTM Y/Y growth (decline), excluding F/X (22 %) (21 %) (15 %) 7 % 15 % N/A
    Operating margin — TTM % of Consolidated net sales 2.9 % 2.7 % 2.5 % 2.7 % 2.7 % N/A
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Y/Y %
    Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 2,197 $ 1,874 $ 2,215 $ 2,903 $ 2,513 14 %
    Media — Y/Y growth, excluding F/X 17 % 18 % 15 % 13 % 14 % N/A
    Media — TTM $ 8,270 $ 8,559 $ 8,847 $ 9,189 $ 9,506 15 %
    Electronics and other general merchandise $ 4,772 $ 4,937 $ 5,061 $ 8,503 $ 6,128 28 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 44 % 41 % 39 % 24 % 28 % N/A
    Electronics and other general merchandise — TTM $ 18,784 $ 20,226 $ 21,652 $ 23,273 $ 24,629 31 %
    Electronics and other general merchandise — TTM % of North America net sales 66 % 66 % 67 % 67 % 67 % N/A
    Other $ 458 $ 515 $ 608 $ 769 $ 750 64 %
    Other — TTM $ 1,613 $ 1,802 $ 2,041 $ 2,351 $ 2,642 64 %
    Supplemental International Segment Net Sales:
    Media $ 2,513 $ 2,245 $ 2,385 $ 3,611 $ 2,545 1 %
    Media — Y/Y growth, excluding F/X 22 % 12 % 12 % 7 % 7 % N/A
    Media — TTM $ 10,261 $ 10,431 $ 10,590 $ 10,753 $ 10,785 5 %
    Electronics and other general merchandise $ 3,203 $ 3,224 $ 3,497 $ 5,431 $ 4,086 28 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 42 % 42 % 39 % 37 % 32 % N/A
    Electronics and other general merchandise — TTM $ 12,314 $ 13,139 $ 13,956 $ 15,355 $ 16,238 32 %
    Electronics and other general merchandise — TTM % of International net sales 54 % 55 % 56 % 58 % 60 % N/A
    Other $ 42 $ 39 $ 40 $ 51 $ 48 14 %
    Other — TTM $ 162 $ 168 $ 170 $ 172 $ 178 9 %
    Supplemental Worldwide Net Sales:
    Media $ 4,710 $ 4,119 $ 4,600 $ 6,514 $ 5,058 7 %
    Media — Y/Y growth, excluding F/X 19 % 15 % 14 % 10 % 10 % N/A
    Media — TTM $ 18,531 $ 18,990 $ 19,437 $ 19,942 $ 20,291 9 %
    Electronics and other general merchandise $ 7,975 $ 8,161 $ 8,558 $ 13,934 $ 10,214 28 %
    Electronics and other general merchandise — Y/Y growth, excluding F/X 43 % 42 % 39 % 29 % 30 % N/A
    Electronics and other general merchandise — TTM $ 31,098 $ 33,365 $ 35,608 $ 38,628 $ 40,867 31 %
    Electronics and other general merchandise — TTM % of WW net sales 60 % 61 % 62 % 63 % 64 % N/A
    Other $ 500 $ 554 $ 648 $ 820 $ 798 59 %
    Other — TTM $ 1,775 $ 1,970 $ 2,211 $ 2,523 $ 2,820 59 %
    Balance Sheet
    Cash and marketable securities $ 5,715 $ 4,970 $ 5,248 $ 11,448 $ 7,895 38 %
    Inventory, net — ending $ 4,255 $ 4,380 $ 5,065 $ 6,031 $ 5,395 27 %
    Inventory turnover, average — TTM 10.4 10.1 9.7 9.3 9.5 (8 %)
    Property and equipment, net $ 4,653 $ 5,097 $ 5,662 $ 7,060 $ 7,674 65 %
    Accounts payable — ending $ 6,886 $ 7,072 $ 8,369 $ 13,318 $ 8,916 29 %
    Accounts payable days — ending 62 68 75 76 68 9 %
    Other
    WW shipping revenue $ 461 $ 469 $ 517 $ 832 $ 633 37 %
    WW shipping costs $ 1,129 $ 1,054 $ 1,153 $ 1,798 $ 1,396 24 %
    WW net shipping costs $ 668 $ 585 $ 636 $ 966 $ 763 14 %
    WW net shipping costs — % of WW net sales 5.1 % 4.6 % 4.6 % 4.5 % 4.7 % N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 65,600 69,100 81,400 88,400 91,300 39 %
    (1) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
    (2) TTM Free Cash Flow divided by Invested Capital.
    (3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

    Amazon.com, Inc.

    Certain Definitions

    Customer Accounts

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    Registered Developers

    • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

    Units

    • References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide – for example www.amazon.com, www.amazon.co.uk… – as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.

     

    Source: Amazon.com, Inc.

  • Nintendo Revises Sales Forecast, Lowers Expectations For Hardware And Software

    Before the Wii U launched, Nintendo said it expected to sell 5.5 million units before the end of its fiscal year in March. It’s entirely possible, but some were skeptical. Now Nintendo doesn’t even think it can reach such a sales milestone.

    Nintendo released a revised sales forecast today that showed it expects to sell less hardware in every category across the board. The company now expects to sell only 4 million Wii U units before the end of March. The company also expects to only sell 4 million Wii units instead of the 5 million it predicted earlier.

    The traditionally stable handheld market isn’t safe from decreased expectations either as Nintendo said it will sell 15 million 3DS units instead of the previously predicted 17.5 million. Sales expectations for the original DS are also down as Nintendo now expects to sell 2.3 million units instead of 2.5 million.

    Software is also down with Nintendo now predicting it will sell 16 million units of Wii U software instead of the originally planned 24 million units. Of course, a number of titles that were expected to release in February or March have been delayed. These delays probably played a larger role in the decreased expectations than anything else.

    It may look bad for Nintendo, but the company is actually operating in the black again after posting its first loss ever earlier this year. Sure, the company will post an operating loss 20 billion yen, but the company has doubled its net profit from 6 billion to 14 billion yen.

    It’s also worth noting that Nintendo will most likely see a sizable sales boost later this year when a number of anticipated titles for the system are released. Nintendo already announced a number of heavy hitting first party titles for the console this year, including a remake of fan favorite The Legend of Zelda: The Wind Waker. The console is also likely to receive a price drop before Microsoft and Sony release their respective next generation consoles later this year. All of this could lead to Nintendo dominating 2013, but it’s far too early to tell at the moment.

    [h/t: The Guardian]

  • Google May Soon Get Better For B2B Sales

    Google May Soon Get Better For B2B Sales

    Google may soon become a better tool for businesses who sell products for other businesses. Google has a new product in beta called Google Shopping For Suppliers, which is essentially a B2B version of Google Shopping.

    Do you think the Google Shopping model will work for B2B? Let us know what you think.

    A Google spokesperson tells WebProNews, “Google Shopping for Suppliers is a beta that helps users searching for B2B products to quickly find what they’re looking for, evaluate options and connect with suppliers to make their purchases.”

    Google has made no formal announcements about the product, but the company tells us the beta launched about two weeks ago, and is U.S. only (for now). It requires listings to be in US dollars by default (though a few European sites have already picked up on the launch), and adheres to the same policies as Google Shopping, but with a handful of exceptions.

    For example, most Pricing and Payments policies for Google Shopping don’t apply, because, as Google notes in a help center article, suppliers and buyers frequently negotiate their price based on item quantity. The same goes for shipping policies.

    “Given that tax requirements vary by buyer’s country and buyers may come from any location, tax practices are not governed by Google policy,” Google also notes. “Suppliers and buyers are expected to abide by local law.”

    Additionally, Google doesn’t require suppliers to post return/refund policies on their sites, which is a departure from Google Shopping’s terms, though it does maintain a requirement that suppliers “conspicuously” post terms for returns/refunds in their Google Shopping for Suppliers listings.

    Finally, Google Shopping For Suppliers doesn’t rely on Google Merchant Center technology.

    The full policies for Google Shopping For Suppliers can be found here.

    So far, the product only returns results for electrical and electronic products, but Google says to check back soon for more product types. It’s easy to imagine a large pool of B2B products populating the results in time.

    It looks like all the merchants that are listed come with the “Google Verified Supplier” label. Google does say that if you become a Google Verified Supplier you can have your products appear higher in the Sponsored results section on Google and on www.google.com/shopping/suppliers. “More product visibility leads to more sales,” the company says.

    Google Suppliers

    Other benefits Google says come with being a verified supplier include:

    • Results from Verified Suppliers show an eye-catching badge that highlights the supplier’s verified status to potential buyers.
    • Products from Verified Suppliers show first in the listings, before those from unverified suppliers, so your products will noticed by interested buyers.
    • As a Verified Supplier, you’ll have a public company profile to add key information to, such as certifications and locations.
    • You’ll be able to add information to your listings that’s critical for the buyer’s purchase decision, such as photos, attributes, customization availability, and lead time.
    • Potential buyers can contact you easily through a form available on all your Verified Supplier product and company profile pages.

    There is an annual verification fee of US$1,000.

    Andrew Davis makes a few additional observations:

    – It looks like Google has not made this a CPC engine yet and after you submit your verification fee you should be able to sell your products in bulk.

    – It looks like the data feed requirements are very different than that for Google Shopping. Make sure you take a close look at them. Namely Price, Shipping, Tax, and Returns and Refunds policies have changed.

    Considering how well Google Shopping has been doing for Google, this could turn out to be an important product for the company in capturing B2B ad dollars.

    Google Product Listing Ads, upon which Google Shopping is based, have been proving way more effective than text ads. Multiple reports have come out recently showing this.

    According to recent Kenshoo findings, “eye-catching” PLAs draw about one and a half times the clickthrough rate of regular text ads, and convert 23% better, resulting in a 31% higher return on advertising spending (ROAS).

    A report from Adobe found that Google increased its marketshare of retail spend by 0.6% in a year to 86.5%, and that almost all its growth came from PLAs. In Q4, PLAs accounted for 10.7% of overall spend, according to the company, indicating that Google’s PLA program is only a little smaller than the Yahoo Bing network, which is 13.8% of total retail ad spend, the company said.

    Just this week, Wired ran a report looking at data from Marin Software finding that advertisers managing $4 billion annually in ad campaigns spent 600% more on Google PLAs after Google’s transition to Google Shopping in October, and that the PLAs were generating 210% higher clickthrough rates than the text ads from the previous year.

    Google PLAs - Marin Software

    Bing has noticed how well product listing ads have been doing for Google, and will soon be launching some of its own.

    Have you had luck with Google Shopping? Do you think Google Shopping For Suppliers has potential to be a game-changer in B2B? Share your thoughts here.

    [Thanks to Andrew Davis for the tip]

  • Amazon Third-Party Sellers Saw Tremendous Sales Over The Holiday Season

    Amazon Third-Party Sellers Saw Tremendous Sales Over The Holiday Season

    Businesses selling their goods on Amazon had their best holiday season yet, according to Amazon. The company has over two million third-party sellers on Amazon Marketplace, and unit growth from U.S. sellers grew over 40% year-over-year.

    “We value the breadth and depth of selection that businesses selling on Amazon offer our more than 188 million active customers worldwide,” said Peter Faricy, VP for Amazon Marketplace. “The entire Amazon Seller organization is focused on helping third-party businesses succeed and grow on Amazon. We do this by creating a dynamic marketplace platform that helps every seller deliver the best possible selection, service and prices to all Amazon customers.”

    Amazon says third-party sellers sold enough smartphone and tablet screen protectors to cover every NFL stadium four times over. That’s not surprising considering the amount of mobile device activations reported for Christmas day alone.

    Interestingly, sellers also sold something like 50,000 Santa hats and 500,000 guitar picks. Amazon says sellers also sold “enough mustache pacifiers to give one to every baby born in Washington State next month,” and “enough tea lights to keep a votive illuminated continuously for over 200 years.”

    Amazon says sellers using its various ecommerce services (like Webstore, Payments and Product Ads) set records in sales volume, traffic and services performance.

  • Tim Cook Is a Technology Lightweight with No Sense of Loyalty, According to Former Apple Exec

    Tim Cook Is a Technology Lightweight with No Sense of Loyalty, According to Former Apple Exec

    When someone who used to work for a company starts talking smack about someone who currently leads said company, you have to question their motives. Nevertheless, when a former Apple sales exec has this harsh of an opinion of Apple CEO Tim Cook, it’s interesting.

    ReadWrite (formerly ReadWriteWeb) talked to David Sobotta, a former Apple sales exec who left the company in 2004. In his time with the company, he never reported directly to Cook, but he did have plenty of contact with him. Cook joined Apple back in 1998.

    According to Sobotta, Cook has plenty of flaws as a leader. Here are some choice quotes from the interview:

    On his relationship with employees:

    “Well, for starters, Cook is not a people person. He certainly will not stand behind someone if the going gets rough. He is not that kind of guy. I sense no personal loyalty in him, and I suspect employees already understand that.

    Tim will react to the numbers or his fear of being wrong quickly. Fear of being wrong is a managerial trait that runs strong and deep in Apple because of the way Steve ran the company. Even the appearance of being wrong when in the end you might be right is dreaded at Apple.”

    On his technology acumen:

    “Technology-wise, I think Tim Cook is a lightweight. I never felt passion for technology from Tim like I did from Steve and some of the great engineers.”

    And on his leadership skills (or lack thereof):

    “I would expect that Tim is having a hard time herding the chickens. From what I saw of him, he was something of a loner. He is not a warm guy nor is he the type to go wandering the halls or Caffe Mac to find out what is happening. His preference is to tinker with spreadsheets and numbers. He is not a natural leader. He’s a manager.”

    Sobotta says that he doesn’t have any reason to beef with Cook, or Apple as a whole. Just a few weeks ago he published his memoir of his 20 years at Apple, titled “The Pomme Company.”

  • Amazon Earnings: Q2 Sales Up 29% (But Not Good Enough)

    Amazon has released its Q2 financial results, missing analysts’ expectations. The report includes net sales of $12.83 Billion, a 29% increase year-over-year. At the same time, net income decreased by 96% to $7 million. The quarter included a net loss of $65 million related to the acquisition of Kiva Systems.

    The company has cast Amazon Prime as a bright spot. Here’s what CEO Jeff Bezos had to say in the announcement: “Amazon Prime is now the best bargain in the history of shopping – that is not hyperbole,” said Jeff Bezos, founder and CEO of Amazon.com. “We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was$79. Since then, Prime selection has grown to 15 million items. We’ve also added 18,000 movies and TV episodes available for unlimited streaming. And we’ve added the Kindle Owners’ Lending Library – borrow 170,000 books for free with no due dates – it even includes all sevenHarry Potter books. What hasn’t changed since we launched Prime? The price. It’s still $79. We’re very grateful to our Prime members, and thank them whole-heartedly for the business and for the word-of-mouth that has made this program grow.”

    At the time of this writing, Amazon stock is down by nearly 2% in after hours trading.

    Here’s the release in its entirety:

    SEATTLE–(BUSINESS WIRE)–Jul. 26, 2012– Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its second quarter ended June 30, 2012.

    Operating cash flow was $3.22 billion for the trailing twelve months, compared with $3.21 billion for the trailing twelve months ended June 30, 2011. Free cash flow decreased 40% to $1.10 billion for the trailing twelve months, compared with $1.83 billion for the trailing twelve months ended June 30, 2011.

    Common shares outstanding plus shares underlying stock-based awards totaled 468 million on June 30, 2012, consistent with 468 million one year ago.

    Net sales increased 29% to $12.83 billion in the second quarter, compared with $9.91 billion in second quarter 2011. Excluding the $272 millionunfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 32% compared with second quarter 2011.

    Operating income was $107 million in the second quarter, compared with $201 million in second quarter 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $8 million.

    Net income decreased 96% to $7 million in the second quarter, or $0.01 per diluted share, compared with net income of $191 million, or $0.41per diluted share, in second quarter 2011. The second quarter 2012 includes $65 million of estimated net loss related to the acquisition and integration of Kiva Systems, Inc.

    “Amazon Prime is now the best bargain in the history of shopping – that is not hyperbole,” said Jeff Bezos, founder and CEO of Amazon.com. “We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was$79. Since then, Prime selection has grown to 15 million items. We’ve also added 18,000 movies and TV episodes available for unlimited streaming. And we’ve added the Kindle Owners’ Lending Library – borrow 170,000 books for free with no due dates – it even includes all sevenHarry Potter books. What hasn’t changed since we launched Prime? The price. It’s still $79. We’re very grateful to our Prime members, and thank them whole-heartedly for the business and for the word-of-mouth that has made this program grow.”

    Highlights

    • Kindle Fire remains the #1 bestselling product across the millions of items available on Amazon.com since launch. Over this same period, the top 10 selling items on Amazon.com were digital products – Kindle, Kindle books, and accessories.
    • Kindle Owners’ Lending Library has grown to over 170,000 books available to borrow for free as frequently as a book a month, including many titles exclusive to Amazon. Additionally, customers can now borrow all seven Harry Potter books in English, French, Italian, German and Spanish.
    • During the quarter, 20 of our top 100 bestselling Kindle titles were from Kindle Direct Publishing authors.
    • Amazon expanded its catalog of title offerings for Prime Instant Video to more than 18,000 movies and TV episodes, announcing licensing agreements with Paramount Pictures and MGM, for titles including Braveheart, Forrest Gump, Mean Girls, Nacho Libre, Clueless, Moonstruck, Rain Man, Silence of the Lambs, Species, Stargate and many more.
    • Amazon.com announced that Prime Instant Video is now available on the Xbox 360 console. Customers can now access Amazon video content through Kindle Fire, PlayStation 3, Mac or PC, or on a TV using either a compatible connected device such as a Blu-ray player or a Roku or directly on compatible Smart TVs.
    • Amazon’s LOVEFiLM, the leading European film and TV subscription service, announced new multi-year agreements with Twentieth Century Fox Television Distribution and NBCUniversal International Television Distribution, providing LOVEFiLM members in the U.K.exclusive streaming access to movies and TV series from the studios, including Despicable Me, Green Zone, and Robin Hood. The agreements are the latest in a long line of exclusive content deals announced by LOVEFiLM, including agreements with Disney, Sony Pictures, Warner Bros., Entertainment One and STUDIOCANAL.
    • North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.33 billion, up 36% from second quarter 2011.
    • International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were$5.51 billion, up 22% from second quarter 2011. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 28%.
    • Worldwide Media sales grew 13% to $4.12 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 15%.
    • Worldwide Electronics and Other General Merchandise sales grew 38% to $8.16 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 42%.
    • Amazon.com announced that developers can now submit mobile apps for distribution through our upcoming appstore launches this summer on the Company’s U.K., German, French, Italian and Spanish sites. In just over one year, the Amazon Appstore onwww.amazon.com has grown to tens of thousands of apps and games. For additional information, visithttps://developer.amazon.com/welcome.html.
    • Amazon.com introduced “GameCircle,” an all-new gaming experience for Kindle Fire, and released a series of APIs for developers to add this new experience to their games. GameCircle offers gaming customers a series of features such as achievements, leaderboards, and sync that make gaming even more fun, convenient and social on Kindle Fire. The newly-released GameCircle APIs will help game developers quickly and easily integrate their games with GameCircle, allowing them to grow their business by reaching new customers and keeping them engaged. For additional information, visit http://amazon.com/gamecircle.
    • AWS relaunched AWS Support with the expansion of free support for all AWS customers, a reduction in pricing on premium support plans and adding multiple new features to help customers better interact with and improve their use of AWS, including chat functionality and proactive alerts when opportunities exist to save money, improve system performance, or close security gaps. The price reduction marked the 20th time AWS has lowered prices since its launch in 2006. For additional information, visit http://aws.amazon.com/premiumsupport.
    • Amazon announced the Amazon Career Choice Program, providing employees with a resource for building the job skills needed for today’s most in-demand and well-paying careers. For employees who’ve been with Amazon as little as three years, the program will pre-pay 95% of the cost of courses such as aircraft mechanics, computer-aided design, machine tool technologies, medical lab technologies, nursing, and many other fields.

    Financial Guidance

    The following forward-looking statements reflect Amazon.com’s expectations as of July 26, 2012. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

    Third Quarter 2012 Guidance

    • Net sales are expected to be between $12.9 billion and $14.3 billion, or to grow between 19% and 31% compared with third quarter 2011.
    • Operating income (loss) is expected to be between $(350) million and $(50) million, down from $79 million in the comparable prior year period.
    • This guidance includes approximately $275 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

    A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

    These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

    Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

    About Amazon.com

    Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

    Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp,www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, and www.amazon.es. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

    AMAZON.COM, INC.
    Consolidated Statements of Cash Flows
    (in millions)
    (unaudited)
    Three Months Ended Six Months Ended Twelve Months Ended
    June 30, June 30, June 30,
    2012 2011 2012 2011 2012 2011
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 2,288 $ 2,641 $ 5,269 $ 3,777 $ 2,047 $ 1,629
    OPERATING ACTIVITIES:
    Net income 7 191 137 391 377 1,038
    Adjustments to reconcile net income to net cash from operating activities:
    Depreciation of fixed assets, including internal-use software and website development, and other amortization 485 244 942 446 1,579 766
    Stock-based compensation 221 144 381 254 684 481
    Other operating expense (income), net 32 41 79 74 158 129
    Losses (gains) on sales of marketable securities, net (2 ) 1 (4 ) 3 (10 ) 2
    Other expense (income), net (19 ) (39 ) (4 ) (2 ) (58 ) (53 )
    Deferred income taxes (43 ) 20 (81 ) 35 20 67
    Excess tax benefits from stock-based compensation (85 ) (15 ) (125 ) (61 ) (126 ) (159 )
    Changes in operating assets and liabilities:
    Inventories (124 ) (274 ) 622 69 (1,224 ) (1,130 )
    Accounts receivable, net and other (166 ) (73 ) 580 286 (572 ) (304 )
    Accounts payable 180 114 (4,078 ) (2,535 ) 1,453 1,835
    Accrued expenses and other 59 63 (470 ) (119 ) 716 663
    Additions to unearned revenue 382 257 779 467 1,376 805
    Amortization of previously unearned revenue (333 ) (251 ) (602 ) (471 ) (1,151 ) (935 )
    Net cash provided by (used in) operating activities 594 423 (1,844 ) (1,163 ) 3,222 3,205
    INVESTING ACTIVITIES:
    Purchases of fixed assets, including internal-use software and website development (657 ) (433 ) (1,043 ) (731 ) (2,123 ) (1,374 )
    Acquisitions, net of cash acquired, and other (624 ) (469 ) (673 ) (608 ) (770 ) (921 )
    Sales and maturities of marketable securities and other investments 1,251 2,028 2,989 3,967 5,864 6,138
    Purchases of marketable securities and other investments (565 ) (2,077 ) (1,417 ) (3,189 ) (4,485 ) (6,746 )
    Net cash provided by (used in) investing activities (595 ) (951 ) (144 ) (561 ) (1,514 ) (2,903 )
    FINANCING ACTIVITIES:
    Excess tax benefits from stock-based compensation 85 15 125 61 126 159
    Common stock repurchased – – (960 ) – (1,237 ) –
    Proceeds from long-term debt and other 123 34 190 123 242 197
    Repayments of long-term debt, capital lease, and finance lease obligations (141 ) (140 ) (293 ) (251 ) (483 ) (398 )
    Net cash provided by (used in) financing activities 67 (91 ) (938 ) (67 ) (1,352 ) (42 )
    Foreign-currency effect on cash and cash equivalents (19 ) 25 (8 ) 61 (68 ) 158
    Net increase (decrease) in cash and cash equivalents 47 (594 ) (2,934 ) (1,730 ) 288 418
    CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,335 $ 2,047 $ 2,335 $ 2,047 $ 2,335 $ 2,047
    SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest on long term debt $ 8 $ 3 $ 14 $ 6 $ 22 $ 12
    Cash paid for income taxes (net of refunds) 20 (1 ) 39 6 66 35
    Fixed assets acquired under capital leases 207 230 356 411 699 673
    Fixed assets acquired under build-to-suit leases 15 97 31 166 125 219
    AMAZON.COM, INC.
    Consolidated Statements of Operations
    (in millions, except per share data)
    (unaudited)
    Three Months Ended  Six Months Ended 
    June 30,  June 30, 
    2012 2011 2012 2011
    Net product sales (1) $ 10,791 $ 8,611 $ 22,040 $ 17,310
    Net services sales (2) 2,043 1,302 3,979 2,460
    Net sales 12,834 9,913 26,019 19,770
    Operating expenses (3):
    Cost of sales 9,488 7,525 19,515 15,133
    Fulfillment 1,356 941 2,651 1,795
    Marketing 537 341 1,017 667
    Technology and content 1,082 698 2,027 1,278
    General and administrative 232 166 432 300
    Other operating expense (income), net 32 41 79 74
    Total operating expenses 12,727 9,712 25,721 19,247
    Income from operations 107 201 298 523
    Interest income 10 16 22 31
    Interest expense (21 ) (15 ) (42 ) (27 )
    Other income (expense), net 50 23 (49 ) 4
    Total non-operating income (expense) 39 24 (69 ) 8
    Income before income taxes 146 225 229 531
    Provision for income taxes (109 ) (49 ) (151 ) (138 )
    Equity-method investment activity, net of tax (30 ) 15 59 (2 )
    Net income $ 7 $ 191 $ 137 $ 391
    Basic earnings per share $ 0.02 $ 0.42 $ 0.30 $ 0.87
    Diluted earnings per share $ 0.01 $ 0.41 $ 0.30 $ 0.85
    Weighted average shares used in computation of earnings per share:
    Basic 451 453 452 452
    Diluted 458 460 459 460
    (1) Represents revenue from the sale of products and related shipping fees and digital content where we are the seller of record.
     
    (2) Represents third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities.
     
    (3) Includes stock-based compensation as follows:
    Fulfillment $ 58 $ 32 $ 94 $ 56
    Marketing 16 10 28 17
    Technology and content 112 75 198 136
    General and administrative 35 27 61 45
    AMAZON.COM, INC.
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
    (in millions)
    (unaudited)
    Three Months Ended Six Months Ended
    June 30, June 30,
    2012 2011 2012 2011
    Net income $ 7 $ 191 $ 137 $ 391
    Other comprehensive income (loss):
    Foreign currency translation adjustments, net of tax of $17, $9, $(21) and $1 (151 ) 31 (14 ) 166
    Change in unrealized gains on available-for-sale securities, net of tax of $1, $(2), $(2) and $3 (3 ) 5 2 (6 )
    Total other comprehensive income (loss) (154 ) 36 (12 ) 160
    Comprehensive income (loss) $ (147 ) $ 227 $ 125 $ 551
    AMAZON.COM, INC.
    Segment Information
    (in millions)
    (unaudited)
    Three Months Ended Six Months Ended
    June 30, June 30,
    2012 2011 2012 2011
    North America
    Net sales $ 7,326 $ 5,406 $ 14,754 $ 10,871
    Segment operating expenses (1) 6,982 5,192 14,061 10,367
    Segment operating income $ 344 $ 214 $ 693 $ 504
    International
    Net sales $ 5,508 $ 4,507 $ 11,265 $ 8,899
    Segment operating expenses (1) 5,492 4,335 11,200 8,552
    Segment operating income $ 16 $ 172 $ 65 $ 347
    Consolidated
    Net sales $ 12,834 $ 9,913 $ 26,019 $ 19,770
    Segment operating expenses (1) 12,474 9,527 25,261 18,919
    Segment operating income 360 386 758 851
    Stock-based compensation (221 ) (144 ) (381 ) (254 )
    Other operating income (expense), net (32 ) (41 ) (79 ) (74 )
    Income from operations 107 201 298 523
    Total non-operating income (expense) 39 24 (69 ) 8
    Provision for income taxes (109 ) (49 ) (151 ) (138 )
    Equity-method investment activity, net of tax (30 ) 15 59 (2 )
    Net income $ 7 $ 191 $ 137 $ 391
    Segment Highlights:
    Y/Y net sales growth:
    North America 36 % 51 % 36 % 48 %
    International 22 51 27 41
    Consolidated 29 51 32 44
    Y/Y segment operating income growth (decline):
    North America 61 % 7 % 37 % 7 %
    International (91 ) (16 ) (81 ) (21 )
    Consolidated (7 ) (5 ) (11 ) (7 )
    Net sales mix:
    North America 57 % 55 % 57 % 55 %
    International 43 45 43 45
    100 % 100 % 100 % 100 %
    (1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.
    AMAZON.COM, INC.
    Supplemental Net Sales Information
    (in millions)
    (unaudited)
    Three Months Ended Six Months Ended
    June 30, June 30,
    2012 2011 2012 2011
    North America
    Media $ 1,874 $ 1,585 $ 4,070 $ 3,470
    Electronics and other general merchandise 4,937 3,496 9,710 6,799
    Other (1) 515 325 974 602
    Total North America $ 7,326 $ 5,406 $ 14,754 $ 10,871
    International
    Media $ 2,245 $ 2,075 $ 4,758 $ 4,147
    Electronics and other general merchandise 3,224 2,398 6,426 4,684
    Other (1) 39 34 81 68
    Total International $ 5,508 $ 4,507 $ 11,265 $ 8,899
    Consolidated
    Media $ 4,119 $ 3,660 $ 8,828 $ 7,617
    Electronics and other general merchandise 8,161 5,894 16,136 11,483
    Other (1) 554 359 1,055 670
    Total Consolidated $ 12,834 $ 9,913 $ 26,019 $ 19,770
    Y/Y Net Sales Growth:
    North America:
    Media 18 % 20 % 17 % 19 %
    Electronics and other general merchandise 41 67 43 65
    Other 58 85 62 80
    Total North America 36 51 36 48
    International:
    Media 8 % 34 % 15 % 23 %
    Electronics and other general merchandise 34 71 37 62
    Other 14 25 19 20
    Total International 22 51 27 41
    Consolidated:
    Media 13 % 27 % 16 % 21 %
    Electronics and other general merchandise 38 69 41 64
    Other 54 77 57 71
    Total Consolidated 29 51 32 44
    Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
    International:
    Media 12 % 20 % 17 % 14 %
    Electronics and other general merchandise 42 53 42 51
    Other 20 13 23 12
    Total International 28 36 30 31
    Consolidated:
    Media 15 % 20 % 17 % 16 %
    Electronics and other general merchandise 42 62 42 59
    Other 55 75 58 70
    Total Consolidated 32 44 33 40
    Consolidated Net Sales Mix:
    Media 32 % 37 % 34 % 39 %
    Electronics and other general merchandise 64 59 62 58
    Other 4 4 4 3
    100 % 100 % 100 % 100 %
    (1) Includes non-retail activities, such as AWS in the North America segment, and miscellaneous marketing and promotional activities, our co-branded credit card agreements, and other seller sites in both segments.
    AMAZON.COM, INC.
    Consolidated Balance Sheets
    (in millions, except per share data)
    June 30, December 31,
    2012 2011
    ASSETS (unaudited)
    Current assets:
    Cash and cash equivalents $ 2,335 $ 5,269
    Marketable securities 2,635 4,307
    Inventories 4,380 4,992
    Accounts receivable, net and other 2,035 2,571
    Deferred tax assets 408 351
    Total current assets 11,793 17,490
    Fixed assets, net 5,097 4,417
    Deferred tax assets 26 28
    Goodwill 2,521 1,955
    Other assets 1,585 1,388
    Total assets $ 21,022 $ 25,278
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 7,072 $ 11,145
    Accrued expenses and other 3,892 3,751
    Total current liabilities 10,964 14,896
    Long-term liabilities 2,553 2,625
    Commitments and contingencies
    Stockholders’ equity:
    Preferred stock, $0.01 par value:
    Authorized shares — 500
    Issued and outstanding shares — none – –
    Common stock, $0.01 par value:
    Authorized shares — 5,000
    Issued shares — 476 and 473
    Outstanding shares — 452 and 455 5 5
    Treasury stock, at cost (1,837 ) (877 )
    Additional paid-in capital 7,573 6,990
    Accumulated other comprehensive loss (328 ) (316 )
    Retained earnings 2,092 1,955
    Total stockholders’ equity 7,505 7,757
    Total liabilities and stockholders’ equity $ 21,022 $ 25,278
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except per share data)
    (unaudited)
    Y/Y %
    Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Change
    Cash Flows and Shares
    Operating cash flow — trailing twelve months (TTM) $ 3,205 $ 3,114 $ 3,903 $ 3,051 $ 3,222 1%
    Purchases of fixed assets (incl. internal-use software & website development) — TTM $ 1,374 $ 1,589 $ 1,811 $ 1,899 $ 2,123 54%
    Free cash flow (operating cash flow less purchases of fixed assets) — TTM $ 1,831 $ 1,525 $ 2,092 $ 1,152 $ 1,099 (40%)
    Free cash flow — TTM Y/Y growth (8%) (17%) (17%) (39%) (40%) N/A
    Invested capital (1) $ 8,551 $ 9,147 $ 9,680 $ 10,006 $ 10,250 N/A
    Return on invested capital (2) 21% 17% 22% 12% 11% N/A
    Common shares and stock-based awards outstanding 468 469 468 464 468 0%
    Common shares outstanding 454 455 455 450 452 0%
    Stock-based awards outstanding 15 14 14 13 16 10%
    Stock-based awards outstanding — % of common shares outstanding 3.2% 3.2% 3.0% 2.9% 3.6% N/A
    Results of Operations
    Worldwide (WW) net sales $ 9,913 $ 10,876 $ 17,431 $ 13,185 $ 12,834 29%
    WW net sales — Y/Y growth, excluding F/X 44% 39% 34% 34% 32% N/A
    WW net sales — TTM $ 40,278 $ 43,594 $ 48,077 $ 51,404 $ 54,325 35%
    WW net sales — TTM Y/Y growth, excluding F/X 39% 39% 37% 37% 35% N/A
    Operating income $ 201 $ 79 $ 260 $ 192 $ 107 (47%)
    Operating income — Y/Y growth, excluding F/X (36%) (77%) (48%) (38%) (34%) N/A
    Operating margin — % of WW net sales 2.0% 0.7% 1.5% 1.5% 0.8% N/A
    Operating income — TTM $ 1,265 $ 1,076 $ 862 $ 732 $ 637 (50%)
    Operating income — TTM Y/Y growth, excluding F/X (7%) (25%) (44%) (50%) (50%) N/A
    Operating margin — TTM % of WW net sales 3.1% 2.5% 1.8% 1.4% 1.2% N/A
    Net income $ 191 $ 63 $ 177 $ 130 $ 7 (96%)
    Net income per diluted share $ 0.41 $ 0.14 $ 0.38 $ 0.28 $ 0.01 (96%)
    Net income — TTM $ 1,038 $ 871 $ 631 $ 561 $ 377 (64%)
    Net income per diluted share — TTM $ 2.26 $ 1.89 $ 1.37 $ 1.22 $ 0.82 (64%)
    Segments
    North America Segment:
    Net sales $ 5,406 $ 5,932 $ 9,902 $ 7,427 $ 7,326 36%
    Net sales — Y/Y growth, excluding F/X 50% 44% 37% 36% 36% N/A
    Net sales — TTM $ 22,208 $ 24,014 $ 26,705 $ 28,667 $ 30,587 38%
    Operating income $ 214 $ 144 $ 285 $ 349 $ 344 61%
    Operating margin — % of North America net sales 4.0% 2.4% 2.9% 4.7% 4.7% N/A
    Operating income — TTM $ 986 $ 943 $ 933 $ 991 $ 1,120 14%
    Operating income — TTM Y/Y growth, excluding F/X 9% 1% (2%) 2% 14% N/A
    Operating margin — TTM % of North America net sales 4.4% 3.9% 3.5% 3.5% 3.7% N/A
    International Segment:
    Net sales $ 4,507 $ 4,944 $ 7,529 $ 5,758 $ 5,508 22%
    Net sales — Y/Y growth, excluding F/X 36% 33% 29% 32% 28% N/A
    Net sales — TTM $ 18,070 $ 19,580 $ 21,372 $ 22,737 $ 23,738 31%
    Net sales — TTM % of WW net sales 45% 45% 44% 44% 44% N/A
    Operating income $ 172 $ 116 $ 177 $ 49 $ 16 (91%)
    Operating margin — % of International net sales 3.8% 2.4% 2.4% 0.9% 0.3% N/A
    Operating income — TTM $ 888 $ 790 $ 640 $ 515 $ 359 (60%)
    Operating income — TTM Y/Y growth, excluding F/X (7%) (23%) (41%) (49%) (57%) N/A
    Operating margin — TTM % of International net sales 4.9% 4.0% 3.0% 2.3% 1.5% N/A
    Consolidated Segments:
    Operating expenses (3) $ 9,527 $ 10,616 $ 16,969 $ 12,787 $ 12,474 31%
    Operating expenses — TTM (3) $ 38,404 $ 41,860 $ 46,504 $ 49,899 $ 52,846 38%
    Operating income $ 386 $ 260 $ 462 $ 398 $ 360 (7%)
    Operating margin — % of Consolidated sales 3.9% 2.4% 2.7% 3.0% 2.8% N/A
    Operating income — TTM $ 1,874 $ 1,734 $ 1,573 $ 1,505 $ 1,480 (21%)
    Operating income — TTM Y/Y growth, excluding F/X 1% (11%) (21%) (22%) (21%) N/A
    Operating margin — TTM % of Consolidated net sales 4.7% 4.0% 3.3% 2.9% 2.7% N/A
    AMAZON.COM, INC.
    Supplemental Financial Information and Business Metrics
    (in millions, except inventory turnover, accounts payable days and employee data)
    (unaudited)
    Y/Y %
    Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Change
    Supplemental
    Supplemental North America Segment Net Sales:
    Media $ 1,585 $ 1,927 $ 2,562 $ 2,197 $ 1,874 18%
    Media — Y/Y growth, excluding F/X 19% 21% 8% 17% 18% N/A
    Media — TTM $ 7,430 $ 7,767 $ 7,959 $ 8,270 $ 8,559 15%
    Electronics and other general merchandise $ 3,496 $ 3,635 $ 6,881 $ 4,772 $ 4,937 41%
    Electronics and other general merchandise — Y/Y growth, excluding F/X 67% 56% 51% 44% 41% N/A
    Electronics and other general merchandise — TTM $ 13,683 $ 14,992 $ 17,315 $ 18,784 $ 20,226 48%
    Electronics and other general merchandise — TTM % of North America net sales 62% 62% 65% 66% 66% N/A
    Other $ 325 $ 370 $ 459 $ 458 $ 515 58%
    Other — TTM $ 1,095 $ 1,255 $ 1,431 $ 1,613 $ 1,802 65%
    Supplemental International Segment Net Sales:
    Media $ 2,075 $ 2,226 $ 3,447 $ 2,513 $ 2,245 8%
    Media — Y/Y growth, excluding F/X 20% 17% 18% 22% 12% N/A
    Media — TTM $ 8,772 $ 9,238 $ 9,820 $ 10,261 $ 10,431 19%
    Electronics and other general merchandise $ 2,398 $ 2,681 $ 4,032 $ 3,203 $ 3,224 34%
    Electronics and other general merchandise — Y/Y growth, excluding F/X 53% 51% 41% 42% 42% N/A
    Electronics and other general merchandise — TTM $ 9,162 $ 10,199 $ 11,397 $ 12,314 $ 13,139 43%
    Electronics and other general merchandise — TTM % of International net sales 51% 52% 53% 54% 55% N/A
    Other $ 34 $ 37 $ 50 $ 42 $ 39 14%
    Other — TTM $ 136 $ 143 $ 155 $ 162 $ 168 23%
    Supplemental Worldwide Net Sales:
    Media $ 3,660 $ 4,153 $ 6,009 $ 4,710 $ 4,119 13%
    Media — Y/Y growth, excluding F/X 20% 19% 14% 19% 15% N/A
    Media — TTM $ 16,202 $ 17,005 $ 17,779 $ 18,531 $ 18,990 17%
    Electronics and other general merchandise $ 5,894 $ 6,316 $ 10,913 $ 7,975 $ 8,161 38%
    Electronics and other general merchandise — Y/Y growth, excluding F/X 62% 54% 47% 43% 42% N/A
    Electronics and other general merchandise — TTM $ 22,845 $ 25,191 $ 28,712 $ 31,098 $ 33,365 46%
    Electronics and other general merchandise — TTM % of WW net sales 57% 58% 60% 60% 61% N/A
    Other $ 359 $ 407 $ 509 $ 500 $ 554 54%
    Other — TTM $ 1,231 $ 1,398 $ 1,586 $ 1,775 $ 1,970 60%
    Balance Sheet
    Cash and marketable securities $ 6,355 $ 6,326 $ 9,576 $ 5,715 $ 4,970 (22%)
    Inventory, net — ending $ 3,229 $ 3,770 $ 4,992 $ 4,255 $ 4,380 36%
    Inventory turnover, average — TTM 11.3 10.8 10.3 10.4 10.1 (11%)
    Fixed assets, net $ 3,470 $ 3,999 $ 4,417 $ 4,653 $ 5,097 47%
    Accounts payable — ending $ 5,721 $ 6,552 $ 11,145 $ 6,886 $ 7,072 24%
    Accounts payable days — ending 69 72 74 62 68 (2%)
    Other
    WW shipping revenue $ 331 $ 360 $ 531 $ 461 $ 469 42%
    WW shipping costs $ 820 $ 918 $ 1,466 $ 1,129 $ 1,054 29%
    WW net shipping costs $ 489 $ 558 $ 935 $ 668 $ 585 20%
    WW net shipping costs — % of WW net sales 4.9% 5.1% 5.4% 5.1% 4.6% N/A
    Employees (full-time and part-time; excludes contractors & temporary personnel) 43,200 51,300 56,200 65,600 69,100 60%
    (1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
    (2) TTM Free Cash Flow divided by Invested Capital.
    (3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

    Amazon.com, Inc.

    Certain Definitions

    Customer Accounts

    • References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

    Seller Accounts

    • References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

    Registered Developers

    • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

    Units

     

    Source: Amazon.com, Inc.

  • iPhone 5 Rumors Mean Lower iPhone Sales For Apple

    iPhone 5 Rumors Mean Lower iPhone Sales For Apple

    Apple released its quarterly earnings report on Tuesday, and included in that were slower than usual iPhone sales.

    The latest rumor is that the iPhone 5 (and possibly the iPad Mini) will be released in September. This piece of rumorformation comes from analyst Ming-Chi Kuo, as reported by BGR.

    Apple CEO Tim Cook and CFO Peter Oppenheimer spoke on the company’s earnings call, acknowledging that speculation about the device has hurt iPhone sales. Essentially, people want to wait for the next version, rather than buying one before it comes out.

    “We’re reading the same speculation about a new iPhone as you are, and we think this has caused some delay in purchasing,” Oppenheimer is quoted as saying.

    Still, it’s not as though Apple isn’t selling iPhones. The company still sold 26 million of them in the quarter, representing growth of 28% over Q3. Apple sold 26 million iPhones in the last quarter, which represents a growth of 28% year-over-year. They also happened to sell 17 million iPads (an 84% increase year-over-year).

    Rumor has it that the iPhone 5 (which may not even actually be called the iPhone 5) is currently in the manufacturing stage. The device, no matter what it’s called, is also rumored to have a smaller dock connector than its predecessors, which will mean it won’t be compatible with many existing iPhone accessories.

  • Galaxy Nexus May Get Jelly Bean Early as Sales Resume Next Week

    When Apple won its victory in court and got an injunction against Samsung selling the Galaxy Nexus smartphone in the U.S., Google was forced to pull the smartphone from the Google Play store, where it had been selling the device unlocked for $400 since April. The company began immediately working on a fix for the device’s software that would allow it to be sold without, as Apple claims, violating Apple patents.

    The Verge reported that a Google spokesperson told the site the company would be rolling out an over-the-air software patch to all Galaxy Nexus phones that would fix the issue Apple had a problem with, which involved the search bar on the phone searching both locally and on the web.

    Now, it appears that Google has decided to scrap its software update plans. Instead, the company will go ahead and push Jelly Bean to the Galaxy Nexus early. Google told ABC News that Android 4.1 Jelly Bean, which it announced just last week at Google I/O, would fix the patent dispute. The company will simply put Jelly Bean on all unsold Galaxy Nexus devices and put them back up for sale on the Google Play store.

    As Google’s lastest version of its Android operating system, Jelly Bean was supposed to launch with the just-announced Nexus 7 tablet later this month. Though the Galaxy Nexus was supposed to be getting an update to Jelly Bean along with the Nexus 7 launch, it now appears that Google’s newest Nexus-branded smartphone will instead be the first device to officially run Android 4.1. That is, of course, assuming that the Nexus 7 launch isn’t taking place sometime next week.

    Currys, a U.K. retailer is listing a July 19 release date for the tablet. If the device launches earlier in the U.S., it may still be the launch device for Jelly Bean. This means Google may simply be waiting for the Nexus 7 launch to re-introduce the Galaxy Nexus.

  • iPhone 5 Rumor: New iPhone Getting In-Cell Touchscreen Technology

    Back in April we told you about rumors surrounding the new iPhone’s touchscreen technology. According to the report, Apple would be using in-cell touchscreen tech in the new iPhone. This technology combines the two layers of the current iPhone’s display – the touch-sensitive glass panel and the LCD display – into one, resulting in a significantly thinner display. A few days later an analyst confirmed the rumors, saying that the new iPhone will be over a millimeter thinner than the iPhone 4S.

    Now there is new information that offers more support for the new iPhone’s in-cell display. According to Topeka Capital Markets analyst Brian White, Wintek has been reporting a significant drop in sales of its display technology. Wintek is a major supply partner for Apple, supplying components for the displays in many of Apple’s iOS devices, including the iPhone. White suggests that Wintek is “ramping down certain programs” because they are “losing market share in key next generation Apple products.”

    In other words, Apple won’t be using Wintek’s components in the next iPhone. While that doesn’t necessarily mean that Apple will be going with in-cell technology, specifically, it does imply that they’ll be making some kind of changes to the display. In-cell is a prime candidate for that.

    [H/T: MacRumors]