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Amazon plans to slash delivery times | |
(about 11 hours later) | |
Amazon has promised to cut delivery times worldwide for customers of its Prime service. | |
Amazon Prime is a subscription service offering free delivery and access to Amazon's TV shows. | |
Members in the US currently receive free two-day delivery, but the plan is to cut that to one day. | |
Prime customers already get free one-day delivery in some parts of the UK. Amazon plans to spend $800m (£620m) to cut delivery times elsewhere. | |
It did not say when delivery times would be cut but said it expects to make "steady progress" this year. | |
Walmart and Target have been improving their delivery times in the US and offer two-day shipping on many items. | |
Amazon's move is an effort to say ahead of those rivals. | |
It already ships many items to US cities within a day, but analysts say extended that service to more remote parts of the country will be difficult. | |
"Amazon is cranking it up a notch, trying to set themselves apart," said Cathy Morrow Roberson, a former UPS analyst who founded consulting firm Logistics Trends & Insights. | |
"I don't know how they are going to do it in Little Town USA," she said. | |
Cloud computing | |
Amazon also reported a first quarter profit of $3.6bn (£2.8bn), double the same period in the previous year. | |
It was its fourth successive quarter of record profit. | |
In the first quarter sales rose 17% to $59.7bn. Amazon expects sales to grow between 13% and 20% in the second quarter. | |
Sales surged at Amazon Web Services (AWS), which provides computing services to companies over the internet - a service know as cloud computing. | |
Launched in 2002, AWS has become a crucial part of Amazon's business, and sales rose 41% to $7.7bn in the three-month period to the end of March. | |
"While the cost of building the data-driven infrastructure to support the cloud systems is vast, the fact it requires such deep pockets actually works in Amazon's favour," said George Salmon, an analyst at stockbroker Hargreaves Lansdown. | |
"It's difficult to see how a new challenger can wrestle business away from the likes of Amazon, Google, and the latest member of the $1tn club, Microsoft." | |
Microsoft has seen its stock market value top $1tn after reporting better-than-expected sales and profits. | Microsoft has seen its stock market value top $1tn after reporting better-than-expected sales and profits. |
The US software giant passed the mark briefly on Thursday, before its share price fell back. | The US software giant passed the mark briefly on Thursday, before its share price fell back. |