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Amazon Identity Crisis?

|Includes: AAPL, Amazon.com, Inc. (AMZN), NFLX

It started as an online book store, moved into music, videos and games, took on apparel, entered into the electronics field, started streaming movies and shows, and now has a tablet. With the deviation from the online retailers original purpose, has the company lost its identity? I think not. The company has been able to transform the publics perception of the company from a book store to an all purpose retailer. Whether it's vitamins, DVD's, TV's, a box of granola or a pair of shoes, it can be found on Amazon.com. 

The company has done well in expanding the product offering while maintaining the largest online retail customer base. With all this success it is no wonder that the company felt compelled to take their success to the next level and compete with the Apple iPad with its launch of the Kindle Fire. With a surprisingly low price tag, the Kindle Fire has real potential to steal market share from Apple, a potential that was never quite reached by Research in Motion's PlayBook or by HP's TouchPad. The tablet has a stunning display, an app store that already has popular titles available, and great streaming content through the companies Amazon Prime service. With a $199 price tag on the tablet, I expect the Kindle Fire to make a huge impact this holiday season. What does concern me is the impact the low cost tablet will have on overall margins. This however I believe will be offset by the company's sale of apps, books, and streaming content.

If the rollout of the Kindle Fire was not enough to make some ground breaking news, the company has also worked on expanding its streaming content library to take a bite out of Netflix. Amazon Prime offers customers streaming content right to their laptop, PC, TV or newly purchased Kindle Fire. This all offered at a single low annual fee of $79, making Amazon's streaming service cheaper than Netflix's. Along with the streaming content, Amazon Prime also offers customers free 2 day shipping and discounted next day shipping. With the holiday season coming along, I greatly expect to see Amazon take advantage of their new position in the tablet and streaming content markets.

This holiday, if your looking for great deals you can certainly find them at Amazon.com. If you don't feel like waiting till Christmas though, buying AMZN should certainly result in an early Christmas present. Unfortunately the stock trades at $239/share which means if your looking to be long the stock, the best route may be through the use of Calls expiring in April.


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: At the moment liquidity prevents me from going long AMZN, however once cash is freed up I would like to go long the 250 April Calls.