Monday, October 25, 2010

New Kindle Sales Exceed Amazon's Expectations


The new generation of the Kindle e-reader is the fastest-selling Kindle of all time, Amazon.com says. The new Kindle offers better readability, expanded battery life, and a $139 price. Book buyers on Amazon are also choosing e-book versions over printed copies. Media tablets are expected to hurt sales of e-readers.

Amazon.com said Monday that its new generation of the Kindle e-reader has already become the fastest-selling Kindle of all time as well as the best-selling product on the company's web sites in the United States and the United Kingdom. What's more, Kindle e-book best sellers continue to surpass their print Relevant Products/Services counterparts at Amazon.com, even as the online retail giant's traditional print book sales continue to grow.
Sales of Amazon's latest Kindle devices, which became available for pre-order in late July, have already surpassed Kindle device sales during the entire fourth quarter of last year, noted Amazon Senior Vice President Steve Kessel. This is "astonishing because the fourth quarter is the busiest time of year on Amazon," Kessel said.
E-Book Best Sellers Beat Print
Amazon's customers are flocking to the new Kindles with their all-new electronic ink Relevant Products/Services screen with a 50 percent higher contrast level that delivers superior readability even in bright sunlight, Kessel explained. He also touted the devices' extended battery life of up to one month, light 8.5-ounce form factor, and $139 price as reasons for the product line's success. "It's clear that this is going to be the biggest holiday for Kindle yet -- by far," Kessel said.
Though the Association of American Publishers reports that e-book sales overall during the first eight months of this year grew 193 percent, Amazon reports that the growth rate of Kindle e-books exceeded the market. What's more, during the past 30 days customers purchasing the top 10 best-selling books on Amazon's web sites have been choosing Kindle e-books over hardcovers and paperbacks at a rate of more than two to one, he added.
"Kindle books are also outselling print books for the top 25, 100 and 1,000 best sellers -- it's across the board," Kessel said. This is "remarkable when you consider that we've been selling hardcover and paperback books for 15 years, and Kindle books for just 36 months.".
The iPad Factor
Though the success of Apple's iPad does not appear to have dented Amazon's new Kindle sales so far, the long-term impact of web tablets on Kindle sales remains unclear. Gartner analysts are predicting that sales of the iPad and other media tablets will total just under 19.5 million units this year and media tablets will have an negative impact on the sale of other devices, including e-readers, that will vary among segments.
"The all-in-one nature of media tablets will result in the cannibalization of other consumer electronics devices such as e-readers, gaming devices, and media players," said Gartner research Vice President Carolina Milanesi.
Though media-tablet pricing remains a constraint for now, Milanesi thinks the average selling prices of tablets will drop below $300 over the next two years. Still, she expects the new devices will pose the strongest cannibalization threat to netbooks.
"Price might be an inhibitor in the early days, but this will soon decrease" and "competition will get fiercer," Milanesi wrote in a recent blog.
Though Gartner expects the main media-tablet volume driver Relevant Products/Services outside the iPad to be the new Samsung Galaxy Tab, the research firm also sees smaller numbers coming from the CiUS and tier-two players, Milanesi observed.
"I do expect Apple to sell more than five million" iPads in the fourth quarter, "and for now I stick by the 19.5 million number," Milanesi said. "I think the main issue will be component constraints, so we continue to monitor that."

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