Amazon's Kindle Statements Could Reflect Apple iPad Concerns

 
 
By Nicholas Kolakowski  |  Posted 2010-12-28 Email Print this article Print
 
 
 
 
 
 
 

Amazon.com is trumpeting sales of its Kindle e-reader, but its public statements could reflect anxiety over the effect of Apple's bestselling iPad on the e-reader market.

Is Amazon.com's Kindle holding off a sales threat from Apple's iPad?

That became the question after the online retailer issued a Dec. 27 press release, boasting that the Kindle had become "the bestselling product in Amazon's history." In order to reach that milestone, the e-reader device apparently had to outsell the seventh Harry Potter book.

That release also seemed intent on drawing comparisons between the Kindle and "LCD tablets," which the blogosphere immediately interpreted as Apple's bestselling iPad. Since the latter's April release, pundits and analysts have freely speculated about the iPad's potential to affect the e-reader market.

According to Amazon, though, its Kindle and the iPad exist in a world of peaceful co-existence. "We're seeing that many of the people who are buying Kindles also own an LCD tablet," Jeff Bezos, Amazon CEO and founder, wrote in a Dec. 27 statement on the company's corporate Website. "Customers report using their LCD tablets for games, movies and Web browsing and their Kindles for reading sessions."

As customary for such statements, Bezos followed that up with a description of the Kindle's supposed advantages as an e-reader: "It weighs less, eliminates battery anxiety with its month-long battery life, and has the advanced paper-like Pearl e-ink display that reduces eye-strain ... and works outside in direct sunlight." He also cited the Kindle's price-point as an attractor, suggesting "it's low enough that people don't have to choose" between the e-reader and a tablet PC.

Amazon has been traditionally reluctant to part with hard sales data regarding the Kindle, despite periodic press releases insisting the device is among its best-selling. A December report from Bloomberg suggested that the company will sell 8 million Kindle units in 2010, outpacing some analysts' estimates of 5 million; the firm drew that estimate from unnamed sources "aware of the company's sales."

Bezos' statement seems in line with his company's recent ad campaign highlighting how tablet PCs, despite their other virtues, lack the capabilities of a Kindle when it comes to actual reading. One 30-second television spot from September features a man and a woman, sitting poolside, with the man struggling to read his tablet PC's screen in the blinding glare. Meanwhile, the woman merrily reads away on her next-generation e-reader. "It's a Kindle, 139 dollars," she tells the frustrated man. "I actually paid more for these sunglasses."

Since that time, Amazon's ads have taken a more mollifying tone: a newer television spot highlights the free Kindle software's compatibility with Android and Apple mobile devices, PCs and BlackBerry smartphones. In a sense, that dovetails with Bezos' official line that Kindle can exist in the same ecosystem as its closest competitors, including the iPad.

The general consensus among analysts is that e-readers, once a niche item, are definitely spreading into the mainstream. Recent predictions from research firm Gartner peg worldwide e-reader sales at 6.6 million units in 2010, a 79.8 percent increase from 2009 (and a good deal lower than Bloomberg's estimates for the Kindle).

"The connected e-reader market has grown dramatically during the past two years, driven by sales of Amazon's e-readers, primarily in North America," Hugues De La Vergne, principal research analyst at Gartner, wrote in a Dec.  8 statement posted on the research firm's corporate Website. However, "growth in North American and other markets will remain constrained by the success of media tablets, such as the Apple iPad." Gartner estimates that e-reader sales will rise another 68.3 percent in 2011, to more than 11 million units.

Other analysts see the iPad threat, despite those robust e-reader sales. A survey from ChangeWave Research suggested that the iPad's share of the e-reader market expanded from 16 percent to 32 percent between August and November, even as the Kindle's market-share dipped from 62 percent to 47 percent.

In other words, it could be the best and worst of both worlds for the Kindle: strong sales, as indicated by the company and analysts, but with the looming threat of the iPad appealing to on-the-fence customers as an all-in-one device. Hence Bezos' statement, perhaps, and the latest bent in Amazon's Kindle ad campaign.

 
 
 
 
 
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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