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Can Amazon’s 3D Phone Fix Failing Profits?


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Amazon over the last eight years maintained a status of profit in a class all of its own. In a little under a decade the value of Amazon’s stock has ranged from 60 dollars to 400 dollars. The company was able to turn a profit relatively fast in what has been called deteriorating technology. That might be changing as recent profit numbers have been slipping with only weeks away from the release of Amazon’s revolutionary 3D phone.

Amazon’s 3D Phoneamazon

Amazon released an eye grabbing YouTube video yesterday pumping up the audience for a new piece of revolutionary technology. Amazon has announced that they will release a 3D smart phone. The teaser has intrigued tech savvy consumers and have brought up speculation that Amazon in an effort to boost revenue has been entertaining the idea of entering into the smart phone wars with Samsung and Apple. The other tech giants inclusive of Apple and Google are also in the running of competition with Amazon, who might be introducing 3D images to potential customers without the use of glasses. Anonymous sources have even indicated that the technology to develop a 3D smart phone is not so new, so the market would be able to quickly catch up and become the new industry norm. The phone would then use retina tracking technology creating an almost hologram and 3 dimensional image detailed on all side.

Amazon’s Failing Numbers

At the beginning of the second quarter when the first quarter profit reports were released, Amazon grew over 23 percent shocking many skeptics with a healthy jump in profits. Over the years Amazon’s revenue gains were always enough to continually drive up the price and value of the company’s share price, because investors were always focusing in on the gains being achieved. Now Amazon’s investors are looking at the profits which have been failing as gains have become stagnant.

While Amazon had reported a revenue of roughly 20 billion dollars, it also reported that the operating income fell by nearly 19 percent to 146 million dollars which meant that net income was around 108 million dollars. What is more unsettling what the projections by the company for next quarter’s profits, a flat revenue. Amazon has stated that they are looking at a 455 million dollar loss. Shares dropped nearly 10 percent down to a value of 300 dollars per share. The 30 dollar decrease in value is a sharp reminder of many high tech companies experiencing stock sell offs following the current trend with dropping share prices. Tesla, Netflix, and Twitter have all experienced some stock market sell offs, which would follow the trend that Amazon has gotten pulled into. The only difference between Tesla, Netflix, Twitter, and Amazon is that Amazon is not as young a company as the other three. In the past, skeptics who have bet against Amazon have come to terms with it being a costly mistake as the value of Amazon’s stocks have risen three times in the last five years. So the pattern would dictate that betting against Amazon now could still be as costly an investing mistake as it has been in the past. As stated earlier, the company has already put into motion technological concepts such as the soon to be released 3D smart phone. Many at Amazon may think that the 3D smart phone will have enough of a surge of revenue to bump share prices back up, while many consumers and investors alike look at the failing retail outlets struggling for business that are still below Amazon in quarterly profit.

Where Share Price is Headedamazon 1

When looking at the failing share prices of Amazon many investors view the company as one of the more mature corporations. Google is also viewed as one of the more mature tech companies as well, but top industry analysts argue that the public shouldn’t because these companies are only very recently coming into their prime. While Amazon isn’t a recruit, it has also maintained a strong sales drive that has dictated success for the company in the past. Usually stock prices are a mere reflection of the predictions of the company of where the investors feel that the company is headed. Amazon has a good history when it comes to developing the value of its stock prices and by following that pattern they should be able to regain their former glory.

Amazon may be currently in a slump but the soon to be released 3D phone may be enough to surge revenue into the company which would help almost immediately fix the issue with the prices of their stock values. It would also give Amazon the profit boost needed to surpass the lowered profit expectations for the next quarter and throw the company into the limelight that is was once in.

 

 

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