Amazon's e-book sales surge: Was it the Kindle or the iPad app?

Amazon's e-book sales surge: Was it the Kindle or the iPad app?

Summary: Amazon is selling 1.8 e-books for every hardcover and the conventional wisdom dictates that the Kindle device is driving those sales. However, it's quite possible that the Apple iPad is driving Amazon's e-book sales as much if not more than the Kindle.

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Amazon is selling 1.8 e-books for every hardcover and the conventional wisdom dictates that the Kindle device is driving those sales. However, it's quite possible that the Apple iPad is driving Amazon's e-book sales as much if not more than the Kindle.

The company said Monday that the Kindle, which will now run you $189, is at a demand tipping point. Amazon, which never gives you hard figures on Kindle sales, said units have tripled since the price was cut from $259 to $189. The natural assumption is that more Kindles equate to more e-book downloads. That's true, but consider:

  • Over the past three months, Amazon has sold 143 Kindle books for every 100 hardcover books;
  • Over the past month, Amazon sold 180 Kindle books for every 100 hardcover books.

The rub: Amazon's price cut was a month ago and definitely helped accelerate things. However, the Kindle to hardcover book ratio was already at an inflection point three months ago. What happened a little more than three months ago? The iPad launched. On April 3, the iPad debuted and sold 300,000 devices. Eighty days later Apple sold, three million iPads.

Meanwhile, Amazon was all set with its snazzy Kindle iPad app. Looking at the figures, it's reasonable to suggest that the Kindle price cut was icing on the e-book cake and the iPad app juiced e-book sales. The last time Amazon shared the e-book to physical book ratio was in the fourth quarter. At that time, Amazon sold 60 e-books for every 100 physical books (the company was only comparing paid books with digital and physical editions).

Related: Kindle vs. Nook: The price war is on; E-reader shipments to surge?

The most plausible reason for the e-book jump is the iPad. Jefferies analyst Youseff Squali connects the iPad dots:

We believe that Kindle's e-book sales are benefiting from the launch of the iPad, since the Kindle e-book store offers a broad (and probably the richest) selection, with over 630K titles, which iPad owners can easily chose from.

Our current estimates for 2H10/FY11 could also prove conservative as we assume only 10% Y/Y growth in Kindle device sales with no contribution to e-book sales from the iPad. A more probable scenario, based on a higher unit sales of Kindle and e-books, yields an additional ~$100M and $200M upside to our revenue estimates for FY10 and FY11.

Squali reckons that there will be roughly 4.62 million Kindles in circulation by the end of the year. Given that figure, it's likely that the iPad led to Amazon's e-book inflection rate.

Topics: Amazon, Hardware, iPad, Mobility

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29 comments
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  • It's obvious the iPad halo effect

    Amazon should thank Apple for the increase in revenue and ultimately the increase in stock price.
    iPad-awan
  • Master Joe Says...Another Possibility?

    While I cannot comment for sure one way or the other, is it not possible that the iPad simply increased awareness of the e-book industry, and that people chose the Kindle due to its price tag? Even before the price cut, the Kindle was already cheaper than the iPad. People looking for a pure e-reader might not have wanted to pay the premium price for the iPad, and may have chosen the Kindle instead, since it was solely to read books on. Again, I can't say that IS what happened, but it's possible. People looked at the iPad, thought it aws great, decided it was too expensive for just reading e-books on, and bought a Kindle instead. I'm sure the Apple fan base won't acknowledge that theory, but it is POSSIBLE.

    --Master Joe
    SteelCityPC
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    Hmmm...me thinks the iPad had allot to do with the increase. I mean, Amazon has sold the same number of units that Apple has. By the end of the year Amazon projects selling 4.62 million units. Apple will have sold about 8 million units by years end (guessing). While the iPad is a multi-purpose device, including productivity work with the iWorks apps, you can't dismiss that the iPad generates Amazon allot of revenue when it's users buy e-books. Go Apple!
    The Danger is Microsoft
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    You also need to factor in the Android devices, there is a Kindle App for that also. It may not be very popular on Android
    mrlinux
  • Maybe iPad also stopped BP oil leak?

    Without stats it is just speculation.
    paul2011
  • You forgot Amizon's app for PC's and Netbooks

    One would think Apple does just about everything.
    jnheroy@...
  • You forgot Amizon's app for PC's and Netbooks

    One would think Apple does just about everything.
    jnheroy@...
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    As an owner of both a Kindle and an iPad, I haven't purchased any more books as a result of having the iPad, although, I now have the option of sharing books with other family members. ?The backlog of physical books is still large in the house, so no other family members have asked to buy their own books... yet. ?

    Amazon certainly know what the impact has been, since you have to explicitly send Kindle eBooks to the iPad, unlike the Kindle. They know exactly how many books are being delivered that way, and they know exactly how many people have Kindle accounts with an iPad as the only delivery option. ?They just aren't making this information publicly available.

    Right now, the Amazon e-commerce system is a huge advantage for Amazon. ?They can tap into reviews of the physical book in the shopping experience, and they now allow you to put Kindle versions of books on your wish list, although it's not possible to purchase directly from the wish list. ?Amazon needs to fix that and allow others to purchase Kindle books for other people. ?I don't know about other people, but the Amazon wish list is the first place my friends and family go to when looking for birthday and Christmas present ideas. ?iTunes wish list? Nope. ?If Amazon fixes this, that's a big hurdle for Apple to overcome.

    If Amazon wanted to start a marketing war, they have the numbers they need. ?They could easily determine how many iPad owners that don't own Kindles are buying Kindle e-Books and put that up against any sales figures for eBooks in Apple's bookstore. ?Personally, I think Amazon is probably winning this battle. ?The only thing they have to overcome is raising awareness that the Kindle app is a free download for the iPad. ?

    About the only area of risk for Amazon will be the segment of books that become apps. ?While textbooks and other reference material fall into that category, mass market fiction and non-fiction probably don't, and are more likely to just get some embedded audio and video, which the Kindle (and iBooks) now support.?
    toddbiske
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    Love the qualifier in the stated state:

    1.8 ebooks per HARDcover book sold.

    What, no SOFTcover stats?!?!
    Scott Kitts
    • Not that many hardcover books anymore ....

      So you are right ..... this is just a COVER for something.
      wackoae
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    Also, Amazon released the Kindle software for free for the Mac and Windows, so people no longer had to buy the Kindle to access it. Same trick Adobe did with Arcobat - reader is no cost, and now everyone uses pdf for everything. Also, the point that Mr. Kitts makes is a valid one - although I suspec the hardback market had a certain fixed level since it takes into account texts and other such items.
    Bruce L
  • Hmm, maybe it's the Android build becoming available?

    I know that having the Kindle app on my Droid has made me reexamine my attitude towards eBooks. I've already purchased 11 books that I would have had to buy in hardcopy format. So there's my input to the increase in Amazon eBook sales. My wife's also started buying books that way as have a number of our employees. And we're all on Android-based phones...
    Timpraetor
    • Kindle in the DROID phone .....

      .... will make LITTLE impact if any on eBook market. O hell, the Kindle on an iPhone is not going to make a dint on the eBook market.

      The Android phones and the iPhone may be good enough to watch a movie and check your email while traveling, but BOTH are too small to read anything for an extended period of time.
      wackoae
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    Not only that... Kindle now has a Blackberry and Android App... all these new platforms are definitely contributing to the sales figures. But, the Kindle is obviously selling really well on its own. It doesn't hurt that the Kindle iOS app is better than the iBooks app offered by Apple and has the added advantage of a reader that syncs to many devices so you can use the one that is best for that moment. iPod Touch might be good when it is low light, Blackberry when waiting at the doctors office, Kindle when outside... PC when killing time during lunch hour... etc. Kindle is an EXCELLENT e-reader app. PLUS... Amazon keeps a copy ready for you and you never have to make backups. Truly the killer app.
    condelirios
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    Instead of pigeon-holing the jump into Steve Jobs' wet dream, can we just consider that the release of the software to all platforms has made it much easier for consumers to buy on demand books. That is all.
    hoaxoner
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    Ratios are meaningless without the underlying number. But even so what is the soft to hard cover ratio ?? I think it's great that Kindle books sales are climbing, as I am a Kindle owner. As noted by others, Amazon have ALL the facts, it is notable that while device sold by Apple is a 'hard fact' (state things enough in the press it becomes a fact) - there are no hard numbers for eBooks sold whether delivered to the Kindle or the iPad. Thus this can only be speculation, built upon selective disclosure by Amazon. In the 'old days' the journalist would have actually worked for the story by getting some inside numbers from a 'source' rather than a press release from the marketing department!
    nigebj
  • My bet:

    Amazon doesn't give a flying fart what the catalyst was. They survived Apple's foray into their market and actually came out stronger. Apple should kill iBooks faster than Microsoft could kill KIN.
    ericesque
  • Perfect storm

    1. Amazon offers new publishing program for new releases to drive prices below $9.99.
    2. Kindle price drop
    3. iPad, 'cause even Apple fans can read.
    4. Android app
    tkejlboom
  • Amazon does not care what device you use.

    The real money is in ebook sales. The real interesting question is how many kindle ebooks were sold on ipad/iphone v. how many ibooks were sold on those devices.
    jhuddle
  • RE: Amazon's e-book sales surge: Was it the Kindle or the iPad app?

    Amazon (AMZN) is selling 1.8 e-books for every hardcover and the conventional wisdom dictates that the Kindle device is driving those sales. However, it?s quite possible that the Apple iPad is driving Amazon?s e-book sales as much if not more than the Kindle.

    The company said Monday that the Kindle, which will now run you $189, is at a demand tipping point. Amazon, which never gives you hard figures on Kindle sales, said units have tripled since the price was cut from $259 to $189. The natural assumption is that more Kindles equate to more e-book downloads. That?s true, but consider:

    Over the past three months, Amazon has sold 143 Kindle books for every 100 hardcover books;
    Over the past month, Amazon sold 180 Kindle books for every 100 hardcover books.
    The rub: Amazon?s price cut was a month ago and definitely helped accelerate things. However, the Kindle to hardcover book ratio was already at an inflection point three months ago. What happened a little more than three months ago? The iPad launched. On April 3, the iPad debuted and sold 300,000 devices. Eighty days later Apple sold, three million iPads.
    thompson44
    <a href="http://www.elkusandsisson.com/">Colorado Criminal Defense Lawyer</a>
    thompson44