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Amazon.com Inc. ( AMZN - Analyst Report ) has recently announced the launch of its Appstore in the U.K., Germany, France, Italy and Spain, giving European customers access to Amazon’s broad selection of Android mobile applications (apps).
Amazon’s Appstore provides a vast selection of paid as well as free games, personalized recommendations and customer reviews. It offers features like the “Free App of the Day,” which enables users to access a paid app for free each day.
The Appstore in Europe is focused on Android apps that users can download or purchase for their Android handsets and tablets. The Kindle Fire tablet, built on the Android OS, uses the Appstore as its main app distribution point, indicating that Amazon’s Kindle Fire will soon hit these European markets.
Amazon entered the competitive tablet market with the Kindle Fire in November 2011. The company is scheduled to unveil a second-generation Kindle Fire at a press conference on September 6. In order to continue its growth and ward off competition from Google’s Nexus 7 and others, the Kindle Fire will need to go international.
We believe the market leader should continue to grow as long as the market is expanding. Since we do not expect the growth to taper off any time soon, we remain optimistic about the company’s prospects here.
At the same time, we think that there is a certain amount of uncertainty regarding Amazon’s investment plans, which could continue over the next few quarters. While it is true that these investments are going to drive the next phase of its growth, near-term earnings will remain under pressure.
At the moment, however, most of Amazon’s competition (whether direct or indirect) continues to come from eBay Inc. ( EBAY - Analyst Report ) , Apple ( AAPL - Analyst Report ) , Barnes & Noble, Inc. (BKS) and Google ( GOOG - Analyst Report ) .
Currently, Amazon has a Zacks #3 Rank, which implies a Hold rating in the near term.
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