analyst downgrades Amazon due to Kindle

[kindlekitten]

Originally Posted by Sischa

Wow, after the financlial crises and especially the debacle with the lehman brothers bank thats a lot of confidence you have in this kind of mechanics

would now be the time to talk about my firm belief in unicorns, the tooth fairy, good men, and other mythical creatures?

Originally Posted by bgalbrecht

. I have no idea what image you had to remove. I have no affiliation to this website other than being a registered user. I have no idea why you were asked to remove the image, but the operators of this web forum have the right to censor as they see fit.

NO YOU DON'T KNOW DO YOU????? Most of the censorship I see here is the deletion of links to pirate sites

ANY YOU WOULD BE WRONG!!!!!

SO HAVE A NICE CUP OF SHUT THE

HECK UP UNTIL YOU KNOW!!!.

Originally Posted by cheerio6414

I completely agree with you. There are not comparing apples to apples. They just see it as one manufacturer to another and not based on product comparison.

thank you you get it partially!

Originally Posted by kjk

Actually, one of her main points wasn't the iPad, but the Nook. Amazon dropped the price of the Kindle to match the Nook, which she thinks means they are no longer making any profit on the hardware.

In addition, she mentions Google Editions as being a potential threat.

and what do we know about that?

[afa]

Originally Posted by LDBoblo

Yawn. Another thread of E-Ink supporters getting offended at a comment about the iPad possibly being a better reading device? How many of these do we need?

I think eleven more oughtta do it...

[GeoffC]

... only ?

[BVLarson]

As I see it, the factor the article isn't taking into account is the exploding ebook market. As it reaches into the billions, Amazon won't hold as big of a share, but the number of dollars they reap will continue to expand. Competition isn't so bad when you are tripling sales in an industry every year.

[afa]

I agree with the above.

Originally Posted by GeoffC

... only ?

Well, after that it just gets redundant...

[kjk]

Originally Posted by kindlekitten

and what do we know about that?

Well, we don't, and neither does she. She's an analyst-her job is to analyze past, current, and future trends in the market, and make recommendations to her clients, which includes potential impacts on Amazon's future profits and earnings. The iPad was just one factor she brought up. Google Editions was another.

The impact on Amazon's short-term and long-term future in eBooks because of the Nook, iPad, Google Editions, and the rapidly changing eBook market as a whole are all speculation right now. She seems to have taken all that into consideration when she cut her forecast for Amazon.

[=X=]

Originally Posted by kindlekitten

partially due to the ipad's color screen. this is kind of disturbing. not because I have stock in Amazon, I try to have stock in the intelligence of people that influence our financial trends. once again this appears to be a blatant case of someone not having a clue as to the difference between the ipad and what it does and the Kindle and what it does.

kinda' scary when you think about how many other completely uninformed similar decisions are out there!

Personally I take analysis comments with a grain of salt, however they are usually great indicators of when to take the opposite position.

The analysis does not understand the business model. While it is correct that Amazon will be losing $70 per unit, which is huge, amazons real business comes from the sales of books and not Kindles. The reason to push the kindles is that they eventually push book sales.

The price drop will actually result in a short term sales loss for Amazon since that is effective immediately.

However there will be an increase in the purchasing of Kindles. So while the price drop does influence Amazon immediate sales figure, it will result in more book sales where that is their true profit.

Also Amazon continues to broaden it's Kindle apps and now has a Kindle apps for every major OS out there. Excluding Win Mobile 7 and WebOS.


I think the iBook threat is a valid point and so is the Google Bookstore. However the Amazon store still has a better selection and since iPad/iPhone/iTouch users can buy books from Amazon I think the initial sales of the iBookstore will start to reduce as folks start to realize the Amazon store is a better choice than the iBookstore.

Personally I think the bigger threat will be the google store, while the iBook store does have a large pool of devices , it is limited to Apple products. The google store will be accessible to more devices and will have a competitive pricing. But since the store does not exist there is no need to worry about it as of yet.


Anyhow that is my $0.02
=X=

[kjk]

Originally Posted by =X=

The price drop will actually result in a short term sales loss for Amazon since that is effective immediately.

However there will be an increase in the purchasing of Kindles. So while the price drop does influence Amazon immediate sales figure, it will result in more book sales where that is their true profit.
=X=

I agree that could definitely be the outcome. But, I also don't think Amazon cut the price of the Kindle 2 for this reason at this time; it seems to me they cut the price because B&N cut the price of the Nook, and they felt they had to respond. I think Amazon was probably pretty happy selling both books AND hardware at a decent profit

[JSWolf]

Originally Posted by kindlekitten

my take is that she was comparing the two as e-readers and using the argument that the ipad has as the deal killer or sealer or whatever. I guess I still don't think they should be compared as ereaders

I would not compare the K2 to the iPad, but the DX is comparable and the DX loses big time. The Kindle iPad app just gives the edge to the iPad and the DX is not in the running. The K2 is not comparable to the iPad due to a number of things.

[JSWolf]

Originally Posted by murraypaul

Well two major eReader manufactures have just made significant price cuts.
Is that coincidental, or do they see the iPad as competition?

Three, not two. Sony cut prices before Amazon & B&N. And Pocketbook also cut prices.

[ppw]

Originally Posted by =X=

However there will be an increase in the purchasing of Kindles.

I think it's the opposite. Here are some of the reasons:

* The competitors' offering are getting stronger. Low cost e-readers are coming if their manufacturers can survive.

* The market for dedicated e-readers, small to start with, is saturating. Most avid readers already have at least one.

* Ipad sold 3 million in 80 days. The 10 million first year target now seems conservative. In about a year, total number of kindles will only be a fraction of Ipads. Not to mention Ipad wannabes and Pixel Qi devices (if they ever come to market.).

The e-books (software) pie will explode in the next few years, but how much amazon can capture the growth? It used to be the dominant player in this area. Soon it will be one of the surviving players grabbing whatever left by Ipad. Wall street is all about growth prospect and leadership. Therefore the downgrade based on e-book market is justified.

[BenLee]

Originally Posted by ppw

In about a year, total number of kindles will only be a fraction of Ipads. Not to mention Ipad wannabes and Pixel Qi devices (if they ever come to market.).

We don't know what Amazon's next move is yet. A Kindle 3 in August can do a lot of damage to iPad's ereader market. Companies are not just sitting around waiting for sales. For every action from one company, we will see a counter-action a few days later. I don't think iPads will have much trouble, but they may not have the super smooth road you describe.

[ppw]

Originally Posted by BenLee

We don't know what Amazon's next move is yet. A Kindle 3 in August can do a lot of damage to iPad's ereader market. Companies are not just sitting around waiting for sales. For every action from one company, we will see a counter-action a few days later. I don't think iPads will have much trouble, but they may not have the super smooth road you describe.

Amazon is not a hardware company. It will never be. Amazon's own Ipad/ipod app will do great damage to Kindle hardware sales. I think Jeff created the two divisions (hardware for kindle, software for kindle app) as a hedge.

Based on Amazon's history with Kindle 1 and 2 releases, I have very low confidence it will do a lot of damage in terms of hardware.

[Redcard]

If I owned a Kindle right now (I sold mine, got an iPad), I would be concerned about Amazon moving into books that have enhanced audio and video, and that are made for a larger, Ipad sized screen.

Because, there is no way the Kindle 2 or any e-ink device is going to incorporate the audio and video, and so that means Amazon now has books out there that its own products cannot use.

What's the incentive to buy a Kindle when I can get the features AND MORE on an app? (Yes, I know e-ink, love e-ink, etc.. but the new Amazon books can't do E-ink.)

The products are the books. Kindle is just the delivery mechanism. I bet Amazon would be thrilled to not have to deal with hardware. I bet they will kill the kindle hw.

[BenLee]

Originally Posted by Redcard

If I owned a Kindle right now (I sold mine, got an iPad), I would be concerned about Amazon moving into books that have enhanced audio and video, and that are made for a larger, Ipad sized screen.

Because, there is no way the Kindle 2 or any e-ink device is going to incorporate the audio and video, and so that means Amazon now has books out there that its own products cannot use.

What's the incentive to buy a Kindle when I can get the features AND MORE on an app? (Yes, I know e-ink, love e-ink, etc.. but the new Amazon books can't do E-ink.)

The products are the books. Kindle is just the delivery mechanism. I bet Amazon would be thrilled to not have to deal with hardware. I bet they will kill the kindle hw.

If their App becomes dominant enough on iPads, iPhones, Androids, Blackberries, etc... Then yea, maybe the Kindle hardware will be over and done with.

Then again, we really don't know what Amazon has up it's sleeve. Kindle 3 may not use e-ink at all. Who knows.

The only thing that's at risk here is e-ink. With their Kindle 1 and 2 being so successful, I don't think Amazon will stop at that without giving 3 a shot.