Bartley now models Amazon selling just 6 million units this quarter of the Fire, down from 8 million previously, and 10.5 million for all of 2013, down from 12.5 million previously. While his investigation of the supply chain last month suggest component orders had risen for both October and November by double digits, he now thinks total Q4 component orders fell by more than 20%.
Writes Bartley, “Although weak Kindle Fire de- mand is potentially positive for profitability, it does imply that Amazon is still struggling to compete against Apple (AAPL), and may even be seeing competition from Google.
Amazon is selling its products at cost or even below cost. The more products they sell, the more money they lose. I’ve said it before — I don’t believe this is a sustainable or a wise strategy.