Amazon launched the Kindle Fire tablet in the hopes to muscle in on another one of Apple’s territories.  Nevertheless, their shares have plummeted this past quarter, leaving Amazon grasping for a solution to address their broadening market position.

The Kindle Fire sells for only $199, way below Apple’s iPad price.  This is good for consumers but bad for the company, as they lose $10 for every Kindle Fire tablet they sell.  Aside from that, the company is also suffering from high costs of shipping.

Amazon reported that their net income fell from $231 million, or ¢51 per share, from last year, and is now down by 73% to $63 million, or ¢14 per share.  Their shipping fees only generated $360 million in the third quarter.

“They missed investors’ expectations,” said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco. The companies’ growth plans aren’t doing enough to spur profit, rather than just sales, he said. “If they don’t show a corresponding increase in earnings, investors start to scratch their heads.”

But Amazon is not losing hope.  They are counting on Kindle Fire sales and consumer demand for their services like e-books, movies etc.  In a conference call with analysts, chief financial officer Tom Szkutak stated that when Amazon executives “think about the economics of the Kindle business, we think about the totality.”

Amazon’s chief executive, Jeffrey P. Bezos, said as part of the earnings release that, “based on what we’re seeing with Kindle Fire preorders, we’re increasing capacity and building millions more than we’d already planned.”

On pre-market trading on Wednesday, Amazon’s shares slumped to $197.91.