Tuesday, November 10, 2009

How many Kindle will be sold?

Since the e-commerce giant, Amazon (AMZN) released its earnings on October 22, 2009, I have been debating with myself whether I should write something about it. Most of my reluctance comes from my inherent resistance to high-tech toys. I have to say I have a good nose for almost everything in fashion except for these gadgets which I dismiss as a guy thing which I , you know, don't wanna barge into. However, I have to admit that Kindle did leave an impression on me at a Xmas party last year when the host's wife proudly showed all female guests her favorite Xmas gift, Kindle. Staring into Kindle held in her hand, the screen itself could easily pass  as a "book" to me rather than "a guy thing". Between the Xmas songs, the Xmas tree, the warm blistful crowd, it even appeared to be "friendly" to me.

This "not-a-guy-thing” has caught a spotlight after almost a year. It has become the top selling products on Amazon, not just in the category of electronics but across the board.

The other part of my reluctance to write about it is the likelihood that I am late on board. Spending too much time on a short-lived hype is definitely not my style. After some thinking and research, it strikes me that this may be revolutionary rather than just a hype. So, maybe late, but not too late.

Because Amazon refused to reveal the sales number of Kindle, we can only rely on analysts' estimate for the moment. According to Techflash,

Citigroup's Mark Mahaney now believes that Amazon will sell 1.5 million Kindles this year -- 500,000 higher than his previous estimate. Likewise, he's saying Kindle revenue could jump to $700 million from $550 million.

Mahaney writes in a research note that Amazon's Kindle price cut -- from $299 to $259 -- is "typical" of the ecommerce giant, coming "prior to the market having a viable competitor." He said the price cut "sets up the Kindle for a full runway for Q4" and increases the reader's chances of becoming "one of the hit products of the holiday season."

He estimates that Kindle will sell 2.7 million units and do $1.5 billion in revenue in 2010, roughly 5 percent of Amazon's total revenue. Amazon hasn't revealed any numbers on Kindle sales -- and CEO Jeff Bezos has suggested the company may never give up that information -- so a lot of this is reading tea leaves.

Amazon's big competition in the e-reader market, Sony, is ramping up its advertising ahead of the holiday season. And there's a bunch of other companies are making plans to jump into the fray, including Irex, Asus, and Plastic Logic.

Forrester Research today boosted its projection for total e-reader sales, saying they'll now reach 3 million units in 2009, with 30 percent of sales occurring during the November-December holiday shopping season. That's up 50 percent from Forrester's previous projection of 2 million units in 2009. The research firm said further that e-reader sales could reach beyond 6 million in 2010.

With the launch of Kindle Global, guessing the sales number will be a more difficult task. But one thing for sure, Kindle will definitely be one of the top Xmas gift this year.

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