Amazon's Kindle Fire Still Burns Bright for Citi Analyst
Citigroup Internet analyst Mark Mahaney told CNBC the Amazon.comKindle Fire's problems are "overstated."
"We think the sales number for the Kindle Fire will be around four million this quarter," he said Monday, adding that sales are still in the early stage.
"There’s a couple of problems with the product" that Amazon partly overcame by pricing the e-reader and Internet surfing device at $199, something he told CNBC when the Kindle Fire was introduced in September.
The Fire, he said, "does a very good job" of allowing people to surf the Internet, access Facebook, and watch videos. The important thing, he said, will be tracking the improvements in the second and third versions.
"The original e-reader had a lot of flaws," he said of Amazon's first Kindle, a new version of which is selling for $79.
Mahaney maintains a "buy" rating on Amazon stock, despite its valuation.
"There's no question Amazon earnings are depressed," he said, adding that one can look at the company as a cyclical stock.
"Amazon is going through a major investment cycle, building out a 30 percent expansion in distribution centers," Mahaney said. "Look, they wouldn’t be doing this if they didn’t see dramatic pickup in demand."
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Mark Mahaney does not own Amazon shares, but Citigroup has been provided investment banking services for Amazon.