Back to top

Analyst Blog

The popularity of electronic gadgets has led Amazon.com Inc. (AMZN - Analyst Report) to add a new subscription feature — Kindle Unlimited — to its Kindle e-reader and Kindle Reading Apps for $9.99 a month.

Kindle Unlimited is a new e-book rental service through which customers can access Amazon’s Kindle libraries which offer 600,000 e-books and thousands of audiobooks. Additionally, Kindle Unlimited subscribers will get a three-month Audible membership with access to the full range of Audible titles. The new service also includes accessibility to other features such as Whispersync, Popular Highlights, X-Ray feature which provide useful insight about books, customer reviews and Goodreads integration, which helps readers to freely search and share books of their choice.

All of these titles, including Kindle exclusive covers like Brilliance, The Hangman's Daughter series, War Brides, Ed McBain's 87th Precinct, Whiskey Sour,Chasing Shadows and many others can be read or listened to on any Kindle device or by using Kindle app on Google’s (GOOGL - Analyst Report) Android and Apple’s (AAPL - Analyst Report) iOS platforms.

The e-book business is changing rapidly due to the increased customer adoption of Kindles, iPads and other devices that are making e-books more attractive than hardcovers. According to a report by PwC (PricewaterhouseCoopers), the trade e-books (excluding educational publications) will reach $8.2 billion in sales by 2017 in the U.S. alone. The e-book market has witnessed an unprecedented growth, as both authors and readers benefit from it.

The continuous addition of new features to Amazon’s e-book reader will surely benefit customers. Amazon, through its Kindle reader and Kindle apps, is currently the leading e-book seller. The company with its Kindle upgrades has strengthened its presence in the market, and currently has more than 60% market share due to attractive pricing.  

In the last-reported quarter, Amazon’s earnings beat the Zacks Consensus Estimate of 22 cents. Though the giant online retailer has proved its ability to become a major player in any market it targets, it seems bent on heavy investments for staggeringly low returns.

Therefore, Amazon has a Zacks Rank #5 (Strong Sell). A better-ranked stock that looks attractive is Vipshop Holdings Ltd. (VIPS - Snapshot Report), sporting a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.