Amazon Soars as Kindle Fire Grabs Market Share

Selling Kindle Fires turns out to have been a very profitable way for Amazon to lose money. The no-frills tablet computer—which sells for slightly less than it costs to make—has now captured more than half of the Android tablet market, with rival tablets from Samsung and Motorola a long way behind, BusinessWeek reports. The Fire sales have given a huge boost to Amazon's sales of digital products, helping it post first-quarter profits yesterday that were above analysts' highest expectations.

"One of the concerns with the shift from physical to digital has been whether Amazon will be able to compete," an analyst at Macquarie tells Reuters. "They've done well in ebooks, but now it looks like they're also doing well in other areas like video." The healthy results sent the company's shares rocketing nearly 15%, adding some $10 billion to its market value—and $2.5 billion to the net worth of CEO Jeff Bezos.