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Amazon to sell 5 million Kindles this year, says analyst

By | September 29, 2010, 8:02am PDT

Summary: Amazon’s Kindle sales are surging, says an analyst. Meanwhile, Amazon’s Kindle apps are allowing it to be a dominant e-book retailer on tablets and smartphones.

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:

Related:

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Topics

Revenue, Amazon.com Inc., Amazon Kindle, Kindle Store App, E-books & E-Readers, Tablets, Notebooks, Personal Technology, Hardware, Notebooks & Tablets, Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

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Talkback Most Recent of 11 Talkback(s)

  • ridiculous
    kindle hardware sales have been a major failure until now, otherwise amazon would disclose the numbers. but they don't, the refuse, they have been doing that for three years now. no sales numbers, no revenue, nothing. spouting these ridiculous claims, without any real, former numbers to back them up smells like market manipulation to me, some of the analyst's client have loaded a lot of amzn calls, i guess.
    ZDNet Gravatar
    banned from zdnet
    29th Sep 2010
  • Like Apple TV?
    @banned from zdnet
    no sales numbers, no revenue, nothing.

    By your logic then, Apple TV is a major failure otherwise Apple would disclose the numbers. But they don't. Apple TV == major failure, at least according to banned from zdnet.
    ZDNet Gravatar
    NonZealot
    29th Sep 2010
  • Well you've been claiming such for a long time now
    @NonZealot
    Cue the double standards:)

    Pagan jim
    ZDNet Gravatar
    James Quinn
    29th Sep 2010
  • RE: Amazon to sell 5 million Kindles this year, says analyst
    @NonZealot I've noticed sales figures for both Kindle and Apple TV come from analysts or pure conjecture - I'd like to know what the actual figures are and why both companies are doing their best to keep such hard figures on the down low.

    As for Apple TV - it's more of a hobby thing anyhow from what I've gathered but I have to admit I'm considering getting one of the new ones to see what it is all about.
    ZDNet Gravatar
    Pete "athynz" Athens
    30th Sep 2010
  • Just tell yourself what you need to hear...
    @banned from zdnet

    Just because you don't want the Kindle to succeed, doesn't mean that it won't.

    Do you honestly believe that Amazon, Borders, Barnes and Noble, and Sony are building e-readers and losing money?

    Even YOU aren't that dumb.
    ZDNet Gravatar
    trickytom3
    29th Sep 2010
  • I apologize
    @trickytom3

    I take it back.

    You are that dumb.
    ZDNet Gravatar
    trickytom3
    29th Sep 2010
    • Flagged
  • insults
    @trickytom3
    that's what you have? personal insults?
    and back to your question: losing money? you mean like motorola and lg producing android smartphones and losing money? (sorry to burst your android bubble too, yes they are losing money in their smartphone business). i not only believe that, it is pretty common with an emerging or supposed to be emerging product category. e-readers are doa. no one makes any money with them, i am pretty sure. but we will probably never know, because, guess what, the producers of these devices will tell you their revenue for any other product category they have, but not e-readers. hmm, why is that?
    ZDNet Gravatar
    banned from zdnet
    29th Sep 2010
  • RE: Amazon to sell 5 million Kindles this year, says analyst
    @banned from zdnet

    Amazon doesn't disclose Kindle sales because the information would be useful to their competitors. As this article clearly points out (for those of you commenters who obviously did not read it), they are required to disclose numbers once a product accounts for 10% of their revenue. So they are forced to disclose book sales, but they're not forced to disclose Kindle until it exceeds 10% of revenue.

    Given their obvious success, would you at least acknowledge that Amazon would not have developed and released the 3rd generation of Kindle if they didn't view it as a successful product? Or do you think that, despite their success, they're so stupid as to keep hammering away at a money loser?
    ZDNet Gravatar
    DaveN_MVP
    30th Sep 2010
  • RE: Amazon to sell 5 million Kindles this year, says analyst
    Analyst take a look at trends - and they fail quite often in their analyzing. Take the netbook, before the iPad, sales were huge. And the analyst said the buying trend would continue. Then came the iPad. And Womp. Sales are down over 40% from last year [not saying the iPad grabbed all of it].

    So Amazon could introduce a new Kindle which as hardware or software issues. There goes that 5 million. On the other hand they could drop the price or a competitor hhas issues. Sales go even higher.
    ZDNet Gravatar
    Gis Bun
    29th Sep 2010
  • Out of stock at Target, Generally on Back Order at Amazon
    Right now all of our local Target stores are out of stock of all models of Kindle - have been for a couple of months. Kindles are constantly on back order at Amazon. Staples and Best Buy will soon be sellling Kindles.

    I know more people who own Kindles than iPads. So my take is that the analyst is probably right.
    ZDNet Gravatar
    kyron.gustafson@...
    30th Sep 2010
  • Who really cares how many they sell?
    I am using the free PC based Kindel reader. I spent money on content. Had I spent the same money on the reader and not on content I bet they would have made less profit. Amazon is in the content business. Selling the reader could be a "money looser" and still make them lots of profit. That's why they give away software readers.
    ZDNet Gravatar
    WBAdairJr
    30th Sep 2010

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