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Absolutely 'Devastating' News For Amazon?

Granted two different Pacific Crest analysts cover Apple and Amazon, but birds of a feather ...

To make it all the more comical, Pacific Crest cites "weak demand" for lower Kindle Fire projections. Really. That's insightful. They take it a step further, though, by calling Kindle Fire "a highly seasonal item." Man, these guys are breaking some freaking ground this week.

Did they all go on a Wall Street analyst retreat over the weekend or something? If so they came back refreshed, comfortably numb, blissfully ignorant or maybe just stoned.

Let's get something straight.

Amazon uses Kindle Fire as a loss leader. Place it in the context of how traditional retailers use loss leaders. Not everybody who walks through the door takes the bait and buys the loss leader. Loss leaders represent just one strategy retailers use to get people to buy stuff -- and more of it -- consistently.

That's how Amazon rolls. It provides several points of entry: Kindle Fire and other possible loss leaders, digital content, Amazon Prime, Subscribe & Save. The list goes on. And it continues to grow.

Amazon is perfectly content selling a modest number of Kindle Fires (either for a loss or right around breakeven; again, this is something we do not know because Amazon doesn't tell us). Each Kindle Fire it sells acts like an Amazon credit card. Amazon is equally as happy living in a world where a majority of mobile traffic takes place on iOS devices and most e-commerce occurs via Amazon.com platforms.

All of this talk about how many Kindle Fires Amazon sells ... it's B.S. Amazon doesn't report that number, not because they're hiding something, but because it's absolutely irrelevant just like so many other talking points the bears latch onto.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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