The Kindle's success - all bluff?

[rmeister0]

Originally Posted by bob_ninja

Also notice the comparison to iPod! His expectations are for millions of devices sold for millions or revenue. He is using a very high standard, as opposed to most readers here having much more modest expectations.

The iPod was not an instant success either. First year sales were okay, but it was expensive and limited to the Mac only. Things picked up with the introduction of the Windows compatible version, but the FireWire requirement, which most PCs didn't ship with at the time, hobbled things. I don't think it really kicked off until 2003 when the iTunes store came out, iTunes for Windows came out, and the USB interface became standard.

In comparison the Kindle has been a viable shipping product for...8 months, maybe? With no advertising in traditional media that I can see and no retail outlets selling the device, the fact that it has sold any is impressive.

[pagansoul]

Two weeks ago I met a fellow in Ikea food court with a Kindle. I told him he was the first person I've seen with one, mine was at home, and we started talking about the things it could do. Ebook readers have never been a big market, everyone doesn't need one, a lot of people don't read for recreation. Most people I know that read, outside of students, are older woman (I myself am over 50).

On my floor at work there are only two of us out of about 60. We are also both Mac people. Something to ponder over.

[DMcCunney]

Originally Posted by Alexander Turcic

Alright, a statement we've already heard before with no meaningful results, so take it with a grain of salt. Or a whole salt lick, actually. This time around, there is this guy from Seeking Alpha (a well-respected financial blog network), Prashanth Cherukuri, who makes no secret of being short in Amazon stock (i.e. betting on a decline to get a lot of money out of it), and who believes that everything we've heard so far about the Kindle's success is nothing but a fairy tale.

We believe what we want to believe.

Not seeing a Kindle in the wild is no proof of anything. I've seen one or two Sony Readers while commuting, but most of what I see are Blackberries, cell phones and hand-held game devices like the DS Lite,

I agree that the Kindle isn't a major source of revenue for Amazon now. But Amazon can use it's market position to leverage it. You get much better pricing on ebooks in the Kindle store than you do from other vendors, but you have to have a Kindle to read them. Care to bet that isn't helping drive Kindle sales? I wouldn't.

Until Amazon releases any actual numbers on revenue derived from Kindle sales, it's all guessing games anyway. But the Kindle is a very minor venture for Amazon in terms of revenue and profit. If they decided it wasn't meeting expectations and killed it tomorrow, I doubt their stock price would be affected.

Amazon is a huge retailer and distributor. I see the Kindle as an experiment on how to leverage their web based retail infrastructure to profitably handle electronic content. The bigger question is what else they might handle.
______
Dennis

[Hadrien]

Originally Posted by Barcey

I recall a lot of dire predictions about the iPod when it was first released because it was Mac only, excluded Windows, firewire only, people wouldn't settle for degraded MP3 quality, nobody needs to carry that many songs with them.

Yeah I remember this post from Slashdot: http://apple.slashdot.org/article.pl.../10/23/1816257

[RickyMaveety]

Read the article. Wasn't impressed. Said so in a comment.

I do take my Kindle with me ... pretty much everywhere. I pull it out and read:

1. In the checkout line at the grocery or anywhere the line looks to be at least 5 to 10 minutes of a wait.

2. During any and all flights (unless I'm the pilot)

3. At the pool

4. In restaurants (unless I'm there with someone)

My Kindle never fails to draw a crowd ... and lots of questions, from both men and women. I tell them the price, about Whispernet, about getting books from both pay and free sites ... and they are clearly impressed.

I also tell them (for the sake of fairness) that there are other companies that make ebook readers, and some are more expensive, some less ... others do not have a keyboard, and if they don't like that aspect, then there are other options. Of course, then they want to know how they can purchase books right from the book without a keyboard .... and that leads me to tell them that, right now anyway, if they want to do that ... the Kindle is the only option.

You know .... clearly whoever this guy is, he understands nothing about exponential growth. It's the old "I tell two friends, and they tell two friends ...." If in the first year, Kindle owners each cause only two people a year to buy a Kindle, and in the second year they do the same and in the third year they do the same .... you start having a LOT of Kindles being sold after not too long a period of time.

[Tom90deg]

I think there's a problem these days with people who are trying to predict Tech, in that, if it's not selling like the iPod, then it's total failure. Have I ever seen a Kindle or any e-reader out in the wild? No. Have I ever seen a Nindendo DS out in the wild? Maaaybe one or two, and these are at airports. The Kindle is a very specific device, and saying that just because you have'nt seen them means it's a failure is a bit short sighted.

It's like saying, "John Deer made a new Tractor. I've never seen one, so watch out! John Deer is going under!" When that person has never been on a farm.

[astrodad]

I just think it's silly to base a product's future based on limited empirical data and also on such limited access to Amazon's actual financial data.

Do I personally like the Kindle? No, but I do hope it does well because it will raise the bar for the other manufacturers.

[Elsi]

Tuesday evening ... Panera Bread in Simi Valley. My Kindle is propped on the edge of a tray to put it at a convenient angle for reading while I eat. A woman walks by the table and stops. "Excuse me, isn't that the Amazon thing? My husband's been talking about it. Hey honey! Come look at this." They stand by my table talking with me about the device. I suggest they sit down and try it out. He's not sure it's what he wants because he didn't see a lot of SF at the Amazon store. So I tell him about Baen -- all SF and fantasy. He's even a fan of David Drake, so that sounds good to him. I also point out that he can see the Sony Reader at Borders if he wants to see a different brand.

Tuesday evening ... LAX. I look up and the young woman seated across from me in the waiting area is reading on a Sony Reader. We talk about the convenience and what types of books we like.

Early Wednesday morning, AA 1740. The guy in the seat next to me pulls out his book and I open my Kindle. We start talking about reading on the plane. He says that on his flight into LA earlier in the day, some guy was showing off his reader to the flight attendants.

That's just in the last 24 hours.

Unlike some of you, my Kindle goes almost everywhere with me. I always have something to read and a flashlight with me -- I'm not willing to have wasted downtime. I even read in the movie theatre while I wait for the feature to start.

Send the author my way.

[pilotbob]

Originally Posted by Alexander Turcic

Quote Prashanth Cherukuri: Kindle isn't going to take off. Yes, there will always be technophiles and other early adopters that get one because it's new or somehow cool.

I bought my Kindle (my Sony first) for neither of these reasons.

BOb

[rskolin]

This article must have appeared in the National Enquirer, right along side the story about how the Russians faked their space program.

[sanders]

Originally Posted by Elsi

He says that on his flight into LA earlier in the day, some guy was showing off his reader to the flight attendants.

Ah, that must've been Mr. Turcic :-)

[TheJohnNewton]

"financial blog network), Prashanth Cherukuri, who makes no secret of being short in Amazon stock"

Enough said. There is no other conclusion this guy could publically state.

[Spartacus2112]

Basically, theory goes with anything new....technology, books, music, fashion. You do not notice people all the time with the latest and greatest. Someone is reading a book, it may not be on the NY Times Best Seller list, or may not be listening to the new music from Rush on their Iphone 3G while wearing the newest fashion.
People notice what they find odd or interesting. Most of the time we just try to get where we are going, and reading our own books, listening to our own music selection, and would not necessarily notice anything out of the ordinary because we are paying attention to what we are doing.
If someone is trying to look for these things, it would prove very difficult. One would have to be in a particular place, at a particular time, with particular people.
If we don't see it, then it must not be successful! Bad way to pass judgement.

[bbusybookworm]

Groan! Why is it that any new consumer electronics are always compared to the iPod?

And even more irritating, not to the ipod when it was introduced, but to the current market figures, or at the most the first USB versions.

Why is it that no analyst can see beyond the next quarter? And then they wonder why they cant match Berkshire Hawthorn, which constantly looks long term.

More seriously, while millions of people read, as a percentage of the population it is quiet small. Add in the factor that the initial buy in is so steep, so most people would not justify the cost unless they spend a fortune on books regularly, have a lack of book stores locally, or want the convenience.

It's going to take some time for the additional benefits to sink in. I feel that Readers are going to be more of a word of mouth product then a Mass market, heavily marketed product.

[DMcCunney]

Originally Posted by bbusybookworm

Groan! Why is it that any new consumer electronics are always compared to the iPod?

And even more irritating, not to the ipod when it was introduced, but to the current market figures, or at the most the first USB versions.

Because the folks doing the comparisons are concerned with big numbers.

Why is it that no analyst can see beyond the next quarter? And then they wonder why they cant match Berkshire Hawthorn, which constantly looks long term.

You mean Berkshire Hathaway, but you're right.

Two anecdotes, incidentally:
Warren Buffet once talked about internet companies. He said if he ever gave a graduate finance class, the final exam would be one question: provide a value for an internet company. Any student who actually provided a value would flunk. Given the dot com boom and subsequent bust, he was on to something.

Buffet's investing partner was once asked by a woman at a dinner party "What's your secret?" His response was "Madam, I'm rational." Most folk's version of rational thought consists of coming up with justifications after the fact for why what they already decided to do was not only a good idea, but the best move under the circumstances, and "most folks" includes "most stock traders", so he had a point as well.

More seriously, while millions of people read, as a percentage of the population it is quiet small. Add in the factor that the initial buy in is so steep, so most people would not justify the cost unless they spend a fortune on books regularly, have a lack of book stores locally, or want the convenience.

It's going to take some time for the additional benefits to sink in. I feel that Readers are going to be more of a word of mouth product then a Mass market, heavily marketed product.

I concur. Readers can't be a phenomenon comparable to the iPod. Not everybody reads, and many who do don't do it for fun.

There's a market, but not the sort of thing the analysts will swoon over.
______
Dennis