Analyst: Kindle will become Billion Dollar Product

By  |  Tuesday, February 3, 2009 at 2:48 pm

Amazon.com has cause to celebrate before it unveils Kindle 2.0 next Monday. Using Apple’s iPod as its model, Citigroup predicts that the Kindle, what it calls the, iPod of the book world,” will become a $1.2 billion dollar business by 2010.

Analyst Mark Mahaney estimates that Amazon sold over 500,000 of the e-book readers last year alone based upon filings about wireless service activations from Amazon partner Sprint. He came to the $1.2 billion figure by assuming that Kindle owners will purchase an e-book every month.

The Kindle seems to be a hit–enough of one that Amazon has struggled to keep up with demand. Whether it is on the road to becoming another iPod is another story. There may be many avid readers, but few people that I know buy a book every single month. It is much easier for people to consume music and video than it is to sit down and find the time to read. And many titles now cost over $10.

Sure, certain segments will buy books regularly–commuters, book club members–but the iPod model may not be the best fit for the Kindle. Would you buy your kids a $300 e-book reader when a single book can occupy them for under $10?

Call me a curmudgeon, but my take is that the Kindle will sell briskly, and it could help e-books become more mainstream–but it won’t become a runaway success like the iPod has been.

 
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2 Comments For This Post

  1. Lacy Kemp Says:

    David, I agree with you here. The Kindle is cool, no doubt, but it is revolutionary? I don’t think so. Heck, I wouldn’t be surprised to see another hardware company come out with something much sleeker. Apple didn’t invent the portable music player, they just refined it. The eReader will continue to e refined. But you’re right, it plays to a different audience- and I feel- a much smaller one. $10 for an eBook seems high. What about a subscription model? Or a rental model? $2 per book for 2 weeks or something. I know I don’t go back and read books a second time, but some people do. I think various pricing models and rental vs. purchasing will also evolve with the refined hardware.

  2. Chris Says:

    That should be good for these guys, considering the Kindle does not have a light!

    http://www.periscopelight.com

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