Amazon announces financial loss despite 23 per cent revenue rise

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Amazon has revealed its second quarter results, reporting a loss of $126 million (74 million) thought to be tied to the launch of its first smartphone - the Fire Phone - despite a rise in sales of 23 per cent.

The firm invested a great deal in a bid to expand its business in 2014, including the release of its first smart phone (on sale today in the US), video streaming with Amazon Prime, document sharing service Zocalo and grocery deliveries.

Jeff Bezos, founder and CEO of, said: "We continue working hard on making the Amazon customer experience better and better."

The significant financial loss eclipses the 23 per cent rise in revenue for the quarter, which pushes earnings up to $19.34 bn from $15.70 billion in the second quarter of 2013, causing shares for the company to drop by 10 per cent in anticipation of further losses.

When unveiled in June, the Amazon Fire phone was deemed a disappointment by critics, with the comparatively high price tag coupled with lack of innovative features making it a hard sell.

The company did reveal that it hopse for a spike in revenue in the next quarter, despite predictions that losses could hit somewhere between $410 million and $810 million in quarter three. Amazon only reported losses of $25 million in the same quarter of 2013.

Amazon was slightly more upbeat about the success of its cloud arm, AWS, reporting 90 per cent growth in usage compared with the same period a year ago. The firm has slashed prices dramatically here, which has likely helped drive interest, in addition to invested massively in staff and infrastructure.

Bezos added:"For our AWS customers we launched Amazon Zocalo, T2 instances, an SSD-backed EBS volume, Amazon Cognito, Amazon Mobile Analytics, and the AWS Mobile SDK, and we substantially reduced prices. And today customers all over the US will begin receiving their new Fire phones including Firefly, Dynamic Perspective, and one full year of Prime we can't wait to get them in customers' hands."

Caroline Preece

Caroline has been writing about technology for more than a decade, switching between consumer smart home news and reviews and in-depth B2B industry coverage. In addition to her work for IT Pro and Cloud Pro, she has contributed to a number of titles including Expert Reviews, TechRadar, The Week and many more. She is currently the smart home editor across Future Publishing's homes titles.

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