The world’s largest online retailer, Amazon.com Inc. (AMZN), recently announced the launch of its first Kindle store in Mexico, enabling Mexican customers to read e-books using Android and iOS apps, Windows 8 PCs and tablets, PC and Mac.
The Mexico Kindle Store will offer over 2 million titles in various languages, including 1,500 free Spanish titles in a collection of more than 70,000 Spanish e-books. The Mexico Kindle Store (www.amazon.com.mx) will offer new releases and best sellers from a number of Mexican and other Latin American authors and publishers. They include works by popular authors such as Carlos Fuentes, Gabriel Garcia Marquez, Mario Vargas Llosa, Isabel Allende and Paulo Coelho, among others. The store will have its usual mix of free public domain titles along with 1,000 of its Spanish e-books prices starting at 9 Mexican pesos each, or 68 U.S. cents.
Additionally, Amazon announced that Kindle and Kindle Paperwhite will be sold at Mexico's Gandhi bookstore chain. Kindle Paperwhite, Amazon’s fifth generation e-book reader, is a visual treat for readers because of it higher contrast ratio. On the hardware front, Amazon has removed all the buttons except the home button, thus, making the device lighter and thinner. On the connectivity front, Paperwhite supports both WiFi and free 3G.
In recent months, Amazon has been aggressively moving into international e-book markets. It is constantly upgrading its e-book reader which is surely benefiting customers. However, while Amazon may have the best e-reader, Apple (AAPL) certainly has the best tablet. Despite the fact that Kindle has acquired many new features over the years, it is not a full-blown tablet. Therefore, given that the tablet market is far larger than the e-reader market, Amazon’s Kindle is unlikely to catch up with Apple’s iPad any time soon.
Last December, Amazon launched its Kindle Store in Brazil and China. It also opened Appstores in certain parts of Europe, including the U.K., Germany, France, Italy and Spain, along with the introduction of the Kindle Fire tablet. The company also announced the upcoming commercial release of the Kindle e-reader in Brazil.
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 unprecedented growth as both authors and readers have benefited from it. Amazon, through its Kindle reader and Kindle apps, is currently the leading seller of e-books. However, if the company is unable to build further on its Kindle or slash prices drastically, it could see its share of overall book spending decline.
This launch of Kindle store will not only provide Mexican customers with a wide selection of books, but will also help Amazon increase its market share in Mexico. We believe Amazon’s strong reputation and credibility and the low pricing of the Kindle will attract Mexican book lovers. This will likely boost Amazon’s e-books and other content sales.
Though Amazon remains one of the leading players in the fast-growing ecommerce market, it reported a loss of 1 cent in the second quarter, which missed the Zacks Consensus Estimate by 5 cents. Also, revenues of $15.70 billion were down 2.3% sequentially but up 22.4% from the year-ago quarter.
The company is making huge investments in fulfillment and technology & content, which might continue to impact the company’s bottom line, going forward.
Currently, Amazon’s shares hold a Zacks Rank #5 (Strong Sell). Other stocks that are performing well at current levels include SanDisk (SNDK) and Syntel Inc. (SYNT). Both the stocks carry a Zacks Rank #1 (Strong Buy).
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