Kindle shortages by design?

Alexander Turcic · 02-06-2009, 03:50 AM

So believes Bernstein Research analyst Jeffrey Lindsay. Reuters reports:

Quote:

Lindsay said backlogs were likely due to Amazon's desire to control Kindle's deployment, adding that Flextronics International Ltd, which many believe manufactures the Kindle for Amazon, could produce them faster and cheaper.

Keeping the Kindle scarce keeps the level of excitement high, and keeps people talking about Amazon, Lindsay added.

Amazon's desire to preserve its success with physical book sales is why it will not sharply lower Kindle's price, he said.

Related: Amazon Kindle 2.0 rumors - price increase

lilac_jive · 02-06-2009, 08:38 AM

I think they kept them too scarce though, if that is true. They lost a lot of sales over the holidays to Sony and others.

But I doubt they are worried about their physical book sales. Why would they?

Steven Lyle Jordan · 02-06-2009, 08:47 AM

If anything, I'd guess that keeping the Kindle scarce is a way to guarantee high sales of Kindle 2 when it comes out, without having to worry about backlogged Kindle 1s.

Considering there are other sources of readers, like Sony, and Amazon hasn't done much to differentiate its product from them in the eyes of the general public, I'd say "keeping the excitement high" is more likely to backfire as those "excited" potential customers get a Sony instead. (Heck, if I didn't know there was a difference in the way they worked... I'd buy a Sony in a hot second!)

rlparker · 02-06-2009, 10:37 AM

Quote:

Originally Posted by Steve Jordan

...Considering there are other sources of readers, like Sony, and Amazon hasn't done much to differentiate its product from them in the eyes of the general public...

I'm not sure of that. Back in the old days (before I started hanging out here on MR) I didn't even know Sony made a reader. I don't think Amazon has to differentiate when the level of awareness of other readers is so low in the general population.

bwaldron · 02-06-2009, 01:25 PM

That article's argument is one of the silliest things I have ever read.

Alisa · 02-06-2009, 01:26 PM

I think they are rather well differentiated. Amazon has a huge, highly visible book store with low prices, good service, free samples and wireless delivery. That matters to a lot of people.

Alisa · 02-06-2009, 01:34 PM

Quote:

Amazon's desire to preserve its success with physical book sales is why it will not sharply lower Kindle's price, he said.

This seems a bit silly. Back when I bought paper books, I bought from many sources, usually brick and mortar. I bought a fair amount of stuff from Amazon but they only got a small percentage of my book buying dollar. I buy fewer books now (due to the free samples) but pretty much all the books I purchase come from Amazon. I think that's likely true of most Kindle owners. People focus so much on sales of the Kindle because it's the big ticket item in this picture but the 80 or so books I've bought in the last year from them isn't insignificant.

Steven Lyle Jordan · 02-06-2009, 02:59 PM

Quote:

Originally Posted by Alisa

I think they are rather well differentiated. Amazon has a huge, highly visible book store with low prices, good service, free samples and wireless delivery. That matters to a lot of people.

I was thinking of the fact that it is not made that clear that someone just hearing about e-books, and purchasing a Sony reader, say, won't get those same features. I do not get the impression that casual consumers are really aware of the difference.

But it has been argued that "casual consumers" likely won't be buying these devices anyway...

Alisa · 02-06-2009, 03:07 PM

Quote:

Originally Posted by Steve Jordan

I was thinking of the fact that it is not made that clear that someone just hearing about e-books, and purchasing a Sony reader, say, won't get those same features. I do not get the impression that casual consumers are really aware of the difference.

But it has been argued that "casual consumers" likely won't be buying these devices anyway...

I think you have a point. We did have a couple people in here after the Kindle store first launched who had bought a Sony reader instead and couldn't figure out how to buy books from Amazon. They were pretty peeved when we told them they couldn't. They had seen the Kindle and the links for Sony Readers also on Amazon (though sold by Amazon Sellers) and they just assumed it would all work together. They hadn't really done any research. I don't think most folks do.

Daithi · 02-06-2009, 03:18 PM

If you are about to release Kindle 2.0 then limiting purchases of Kindle 1.0 doesn't seem like a really smart way of increasing buzz.

However, if Amazon's supplier could produce the devices then it doesn't seem very smart to get Oprah to market the product and then not have enough to sell. Nor does it seem very smart to not have enough to sell for the Christmas season. So who knows.

cobalt8 · 02-06-2009, 04:00 PM

Well, I'm glad I'm not alone in considering the thought that Amazon caused a shortage on purpose.

ProDigit · 02-06-2009, 07:35 PM

Perhaps they wanted customers to still have money for their next version..(Kindle 2)
The first version usually comes with issues.

basschick · 02-06-2009, 07:58 PM

sure it does - we're sitting here talking about it. so are other people i know, some of whom haven't even considered an ebook reader at this point. and people love to feel they are scoring something scarce - maybe it's the hunter/gatherer in us. while i doubt that amazon ran out of kindles on purpose, you never know.

Quote:

Originally Posted by Daithi

If you are about to release Kindle 2.0 then limiting purchases of Kindle 1.0 doesn't seem like a really smart way of increasing buzz.

ProDigit · 02-06-2009, 08:15 PM

A second version generally will be looked at in a better light then the first version.
Expected will be that it will not only do better, but look better, and do more!
Why else have a reader upgrade?

I'm sorry about the comment (kindle 2).
I just hadn't read the reply.This page was loaded this morning; I had things to do, and I only posted the reply now (evening).

Boston · 02-06-2009, 10:11 PM

I think there was a planned 30-60 day gap between Kindle 1 and 2 (otherwise, they would be dealing with people unhappy having just bought a Kindle 1 and/or returning Kindle 1 if less than 30 days).

However, I think they planned production based on what they thought they needed to get through the holidays but the unanticipated volume of Oprahs sales made them run out earlier than anticipated.

02-06-2009, 01:25 PM	#5
bwaldron Wizard Posts: 1,229 Karma: 543210 Join Date: Feb 2008 Location: Gatlinburg, Tennessee Device: Kindles: Paperwhite Signature Ed., Oasis 2, Voyage	That article's argument is one of the silliest things I have ever read. Last edited by bwaldron; 02-06-2009 at 01:33 PM.

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02-06-2009, 08:38 AM	#2
lilac_jive Grand Sorcerer Posts: 5,870 Karma: 27376 Join Date: Dec 2008 Location: Pennsylvania Device: PRS-505	I think they kept them too scarce though, if that is true. They lost a lot of sales over the holidays to Sony and others. But I doubt they are worried about their physical book sales. Why would they?

02-06-2009, 08:47 AM	#3
Steven Lyle Jordan Grand Sorcerer Posts: 8,478 Karma: 5171130 Join Date: Jan 2006 Device: none	If anything, I'd guess that keeping the Kindle scarce is a way to guarantee high sales of Kindle 2 when it comes out, without having to worry about backlogged Kindle 1s. Considering there are other sources of readers, like Sony, and Amazon hasn't done much to differentiate its product from them in the eyes of the general public, I'd say "keeping the excitement high" is more likely to backfire as those "excited" potential customers get a Sony instead. (Heck, if I didn't know there was a difference in the way they worked... I'd buy a Sony in a hot second!)

02-06-2009, 01:26 PM	#6
Alisa Gadget Geek Posts: 2,324 Karma: 22221 Join Date: Aug 2007 Device: Paperwhite, Kindle 3 (retired), Skindle 1.2 (retired)	I think they are rather well differentiated. Amazon has a huge, highly visible book store with low prices, good service, free samples and wireless delivery. That matters to a lot of people.

02-06-2009, 03:18 PM	#10
Daithi Publishers are evil! Posts: 2,418 Karma: 36205264 Join Date: Mar 2008 Location: Rhode Island Device: Various Kindles	If you are about to release Kindle 2.0 then limiting purchases of Kindle 1.0 doesn't seem like a really smart way of increasing buzz. However, if Amazon's supplier could produce the devices then it doesn't seem very smart to get Oprah to market the product and then not have enough to sell. Nor does it seem very smart to not have enough to sell for the Christmas season. So who knows.

02-06-2009, 04:00 PM	#11
cobalt8 Enthusiast Posts: 34 Karma: 12 Join Date: Jan 2009 Location: Stuttgart, Germany/Wilmington, NC Device: Kindle 2, iPhone	Well, I'm glad I'm not alone in considering the thought that Amazon caused a shortage on purpose.

02-06-2009, 07:35 PM	#12
ProDigit Karmaniac Posts: 2,553 Karma: 11499146 Join Date: Oct 2008 Location: Miami FL Device: PRS-505, Jetbook, + Mini, +Color, Astak Ez Reader Pro, PPW1, Aura H2O	Perhaps they wanted customers to still have money for their next version..(Kindle 2) The first version usually comes with issues.

02-06-2009, 08:15 PM	#14
ProDigit Karmaniac Posts: 2,553 Karma: 11499146 Join Date: Oct 2008 Location: Miami FL Device: PRS-505, Jetbook, + Mini, +Color, Astak Ez Reader Pro, PPW1, Aura H2O	A second version generally will be looked at in a better light then the first version. Expected will be that it will not only do better, but look better, and do more! Why else have a reader upgrade? I'm sorry about the comment (kindle 2). I just hadn't read the reply.This page was loaded this morning; I had things to do, and I only posted the reply now (evening).

02-06-2009, 10:11 PM	#15
Boston Fanatic Posts: 555 Karma: 40032 Join Date: Oct 2008 Location: Boston :) Device: Kindle, Kobo Aura H20, Pixel XL	I think there was a planned 30-60 day gap between Kindle 1 and 2 (otherwise, they would be dealing with people unhappy having just bought a Kindle 1 and/or returning Kindle 1 if less than 30 days). However, I think they planned production based on what they thought they needed to get through the holidays but the unanticipated volume of Oprahs sales made them run out earlier than anticipated.

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