Amazon is likely to sell about 5 million Kindle e-readers this year and 11.5 million in 2012, according to Barclays Capital analyst Douglas Anmuth.
In a research note, Anmuth said that Amazon is likely to benefit from strong holiday sales fueled by the Kindle. He projected that Amazon shares will hit $180.
Anmuth noted that the Kindle devices are no longer in competition with tablets like Apple's iPad. He said:
A bifurcated market has clearly developed between more expensive, multi-function tablets and cheaper, dedicated eReaders. We project Amazon will sell more than 5 million Kindles this year, going toward 11.5 million in 2012. We project total Kindle related revenue to reach $1.7 billion in 2010 (5.0% of Amazon total revenue) and grow to $4.3 billion in 2012 (8.9% of total revenue).
Unfortunately, we won't know Amazon's Kindle related revenue because the company won't disclose it. Even in 2012, Kindle revenue won't hit the 10 percent of revenue mark. Once a business is 10 percent of revenue it's usually material enough to be disclosed in financial filings.
A few key points from Anmuth about the Kindle:
- Price cuts accelerated Kindle device sales.
- The $139 Wi-Fi only Kindle will sell well at Best Buy, Target and Staples.
- Kindle book sales will grow from 90.6 million in 2010 to 527.6 million in 2012.
- Kindle apps and Whispersync will be the big differentiator for Amazon.
- Average selling prices for the Kindle will drop to $184 in 2010 and reach $102 by 2012.
- Amazon will have 43 percent of the tablet content market in 2010. Regarding tablets, Anmuth said:
We assume that Kindle books sales on tablets will become increasingly material as tablets gain popularity and Amazon continues to provide a strong content offering. The Kindle Store app has consistently been one of the top 20 most popular apps on the iPad, and has ranked as high as #8 overall. Commentary from individual authors saying that they sell in certain cases 60x as many books in the Kindle Store as they do the iBook store has led us to believe that the Kindle Book store likely has a large following on the iPad already. Amazon also announced on Monday that they would be launching a Kindle app for the New BlackBerry PlayBook Tablet Computer.
The Barclays report has a bevy of e-reader and tablet projections. Here's an abbreviated version of one chart:
- Amazon launches Kindle Web; Read e-books via browser, embed them
- The 10 best choices for an e-reader
- Ready to ditch paper? Here are the 10 best e-readers
- Here comes the retail e-reader showdown: Best Buy to stock Amazon’s Kindle
- Sony’s latest e-readers: Understanding the trade-offs and global strategy
- Borders fires back at Amazon and B&N with $99 ebook reader and color options
- Review: My 20 minutes with Amazon’s latest Kindle
- Kindle vs. Nook: The price war is on; E-reader shipments to surge?
- Back to School Guide 2010: Ebook readers
- Amazon unveils new Kindle; Assessing the e-reader fallout
- E-reader and e-book topic page