Amazon Will Sell 550,000 Kindle E-Readers in 2009, Says Analyst

 
 
By Nicholas Kolakowski  |  Posted 2009-12-01 Email Print this article Print
 
 
 
 
 
 
 

Amazon.com is expected to sell over half a million Kindle e-readers in 2009, according to a research note released by Collins Stewart. That report comes just as Barnes & Noble announces that its Nook e-reader, judged by many to be the Kindle's primary competition, will not ship units preordered after Nov. 30 until Jan. 11. Although the Kindle is the most well-known e-reader, more than 40 other e-reader mobile devices continue to push for their own share of the market.

Amazon.com is expected to sell about 550,000 Kindle devices in 2009, according to a research note issued on Dec. 1 by financial advisory group Collins Stewart. The note's chief author, Sandeep Aggarwal, also pointed out that the Kindle faces competition from about 40 other e-readers, including Barnes & Noble's Nook device.

The report comes just as Barnes & Noble announced on its site that Nook e-readers ordered after Nov. 30 will ship on Jan. 11. The device will make its debut in Barnes & Noble's bricks-and-mortar stores starting on Dec. 7, although only high-volume retailers will receive Nooks for actual sale. The bookseller has repeatedly suggested that high demand is the cause for the delays.

Acknowledging that Amazon.com continues to keep the exact sales numbers for the Kindle a secret, Aggarwal nonetheless predicted that the company would sell around 450,000 Kindle 2 devices and 100,000 Kindle DX devices in 2009. The analyst declined to explain in detail how he arrived at that number.

"We think that even under a conservative scenario, Kindle creates a much bigger mousetrap for Amazon than the traditional books business," Aggarwal wrote. "Kindle not only removes multiple costs and inefficiencies from the current value chain for books ... but also increases propensity to buy books [or other] content and other adjacent products."

As Aggarwal sees it, one of the Kindle's advantages for Amazon.com is that "Kindle owners buy 2.7 [times] as many books as they bought prior to owning the reader." That inclination toward increased book purchasing, in Aggarwal's view, will lead to Kindle owners not only into "buying more e-books but also subscriptions, accessories [and] hardware warranties, and eventually use Kindle's wireless and computing capabilities for other data and content."

This year, Aggarwal predicts total Kindle revenue of $301.4 million, increasing to $671.4 million in 2010, $1.2 billion in 2011 and $1.8 billion in 2012.

On Nov. 30, Amazon.com said the Kindle had achieved its "best-ever" sales for November, while continuing its tradition of refusing to break out exact sales numbers. Amazon CEO Jeff Bezos has previously suggested that Kindle sales account for a third of the online retailer's book-related revenue.

The prospect of holiday competition has forced Amazon.com to lower the price of the Kindle to $259, matching that of the Nook. With a price war, however, comes the prospect of an overall expansion in the e-reader market, which Forrester Research predicted would amount to sales of 3 million units in 2009. The larger-screen Kindle DX, which faces little direct competition, continues to maintain a price point of $489.

Of the 40 e-readers currently on the market that Collins Stewart deemed "most popular" in its research note, devices by Samsung, Sony, Pocketbook, NeoLux, HanLin eBook, Cool-ER, Astak and Bookeen-most of them smaller manufacturers-all priced out at below $300. The report judged that Google, which has announced substantial plans for the digital book market, also remains something of a competitive threat to Amazon.com.

Until Amazon.com decides to release hard numbers, however, analysts' figures remain educated speculation.

 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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