Kindle-related sales reach almost 10 percent of Amazon's revenue

Summary:Amazon's core business of online retail still produces the overwhelming bulk of the company's revenue, but the Kindle is pulling its weight.

Amazon's core business of online retail still produces the overwhelming bulk of the company's revenue, but the Kindle is pulling its weight.

As Amazon pushes forward with its cloud locker, it better not ignore the Kindle. According to a Citi analysis of Amazon's business released today, Kindle-related purchases are growing at a rapid pace:

Kindle Traction Surging; Kindle Closing In On 10% Contribution - The headline here is that based on recent disclosures by Amazon and our own sensitivity analysis, we now estimate that Kindle-related revenue is likely to reach close to 10% of AMZN’s total revenue by 2012. With Kindle book sales having now surpassed Amazon print book sales, eBooks have clearly reached critical mass for AMZN and its P&L -- we now see 18MM Kindle units & 310MM Kindle books sold in ‘11.

Citi analysts have also updated their Kindle device sales predictions from 16.5 million units sold in 2011 to 17.5 million units, and up to 26 million Kindles in 2012. With the addition of two slightly-new Kindle models this year, the Special Offers Wi-Fi and 3G (not to mention the expected Amazon/Samsung tablet this year), those predictions look spot on.

Additionally, Citi mentions that it has this "rule" that "when one segment achieves 10% of the total business, it can impact the growth rate of the total business." In that case, the Kindle is much more than just something Amazon has produced and sells. It's becoming what people shop at and recognize Amazon for, and the Kindle's continued success (or unlikely failure) will ripple throughout the company.

[via GigaOm]

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Topics: Banking, Amazon, Enterprise Software

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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