Kindle Will Be 10% of Amazon Sales in 2012

[L.J. Sellers]

Citi Bank analyst Mark Mahaney maps out the growth of Amazon's Kindle device and ebook sales, predicting that ebook sales will outpace device sales in 2012 (3.7 billion from ebooks and $2.4 billion from the device). I note that he uses the term sales rather than profit or revenue.

http://techcrunch.com/2011/06/07/kin...-sales-amazon/

[lestatar]

!!!

Indeed! Critical mass for digital books and ebook readers is rapidly approaching, if not already here.

Though I have been reading digitally for years, only recently have I gone and grabbed a dedicated ebook reader. I am thoroughly enjoying my K3 experience thus far.

However, nothing will ever quite match the wonderfully tactile sensation of turning paper pages with my fingers or the unique smell of books as they age. At least to this lifelong book lover.

[Anarel]

Go Amazon!

@ Lestatar,

Do you like to read, or do you like books? I am a lifelong lover of reading.

[RainingLemur]

Wouldn't surprise me in the least if the Kindle wound up being 10% of Amazon's sales. They certainly push it enough.

[lestatar]

Originally Posted by Anarel

Go Amazon!

@ Lestatar,

Do you like to read, or do you like books? I am a lifelong lover of reading.

Great question and I think I understand the distinction you are making here.

If I had to choose, indeed, it is reading that I love best, no question. I think it safe to say we all feel similarly here

Still, the physical nature of books themselves is pretty satisfying to my senses on so many levels. Smell, touch, visuals...even the sound of pages turning is pleasing to me.

A [not so] secret quirk of mine: when purchasing books from brick and mortar stores, I will handle as many copies as I need to in order to find the ones that are in the most pristine condition. I have actually gone to multiple retailers in order to obtain the mint-est copy of a book from certain favorite authors. Fairly easy to do though in my native NYC, especially with multiple BNs around.

An ex-gf commented that it was exactly like someone picking fruit.

My books also stay in as mint a condition as possible, even after reading. No folded pages, no torn covers, no broken spines, no heavily damaged dust jackets, etc...

what can I say?

PS: as an Amazon customer pretty much from when they started, I distinctly remember being hooked on them after I received my very first book order and saw how well they packaged my books.

They had me at the shrink-wrap.

[ardeegee]

Originally Posted by lestatar

Still, the physical nature of books themselves is pretty satisfying to my senses on so many levels. Smell, touch, visuals...even the sound of pages turning is pleasing to me.

And don't forget taste!

Oh, how I miss licking my books-- the leathery taste of a leather cover, the papery taste of the pages. Glass and plastic just have no flavor to them!

[crich70]

I wouldn't be surprised if the writer was a bit on the conservative side either. I think the genie has already left the bottle on ebooks. I have always loved to read. I got my 1st library card some 37 yrs ago when I was 3 and haven't stopped reading since. Many nights when I was a kid I'd hear "put down the book, turn off the light and go to sleep" from my mother who had no one but herself to blame since she's the one who took me to get that 1st library card. lol. Probably when I die they'll have to pry my ereader (whatever it is at that point in time) out of my hands afterward.

[lestatar]

^^

<facepalm!> How could I forget? There's nothing like fresh sashimi paper and wasabi.

I never cook my books

[fjtorres]

Originally Posted by crich70

Probably when I die they'll have to pry my ereader (whatever it is at that point in time) out of my hands afterward.

Long before then, dedicated readers will likely be glasses you wear, with an eyeball tracking auto paging mode. And folks will whine about missing the physicality of the page turn buttons, the feel of the touchscreen under their fingertips, the smell of their old Oberon leather cover...

And you'll still hear people raising all kinds of FUD about how Amazon is still, real-soon-now, going to ruin the publishing industry, just you wait and see.

[SensualPoet]

According to Mahaney, the Citi analyst quoted: "The number of Kindle books sold this year will increase to an estimated 314 million, from 124 million in 2010. And Mahaney expects that number to grow another 140 percent in 2012 to 752 million."

Momma! That's a lot of electrons changing hands!

In yesterday's Amazon Annual Meeting, Jeff Bezos said the company is selling more ebooks -- units sales and revenue -- than pbooks ... even while pbooks continues to grow in unit sales and revenue. Slice and dice Amazon's data any way you like ... it's a remarkable business that did not exist four years ago and was barely a blip two years ago.

The analyst also estimates that the installed base of Kindles at Jun 2011 is 15.5 million and that this will grow to 26 million by end of year 2011. Put another way: Amazon is shipping/selling 60,000 Kindles every day to end user consumers either directly or through its associate sales channels.

Amazing.

[J. Strnad]

I'm taking all Amazon sales figures with a grain of salt. Since there's no substance to the claims in the form of actual statistics, we can't really trust the conclusions.

As L. J. says, we don't know if they're talking units or sales or profit or what, exactly. Do free ebooks count as sales? What about all of those short stories sold separately?

The other big statistic I don't believe is B&N's share of the market. I know, I just have one book and it's in a particular genre and you can't extrapolate from that, but when I hear that B&N has 25% of the ebook market but my own sales are 20-to-1 or greater in favor of Amazon, I have to wonder.

[MikeB1972]

Originally Posted by ardeegee

And don't forget taste!

Oh, how I miss licking my books-- the leathery taste of a leather cover, the papery taste of the pages. Glass and plastic just have no flavor to them!

Smear honey on the bevel.

[spellbanisher]

Originally Posted by J. Strnad

I'm taking all Amazon sales figures with a grain of salt. Since there's no substance to the claims in the form of actual statistics, we can't really trust the conclusions.

As L. J. says, we don't know if they're talking units or sales or profit or what, exactly. Do free ebooks count as sales? What about all of those short stories sold separately?

The analyst specifies revenues. He calculates that ebook sales will account for 3.7 billion dollars in revenue, and ereader sales 2.4 billion dollars in revenue. Now how does the analyst calculate this? He doesn't give a method, but I presume there are ways to deduce. For instance, we know total book sales because they are reported by publishers to investors. What we don't know the distribution of the book sales, i.e., whether those books are sold in large retailers or small bookshops. However, because most books are sold by major public corporations like Barnes and Noble and Wal Mart, analysts can subtract those known sales from the total sales. After that they have to calculate the sales of smaller book sellers, and there are ways to do that. One way might be to look at a sample of the tax receipts of smaller booksellers, and then extrapolate based on the known number of smaller booksellers sellers to determine their share of the market. Any marketshare unaccounted for can be, for the most part, attributed to Amazon.

Ereader sales might be a little trickier, but calculating the sales of ereaders might depend on looking at the ereader supply chain. All ereaders use the same parts, like eink screens and batteries and so forth. Undoubtedly, some of these parts will be produced by corporations, who must report their earnings to the public. If, for instance, eink screens where made by a corporation, they could easily calculate the total number of eink screens produced. Since a companies like Barnes and Noble and Sony are corporations, they can easily ascertain the number of ereaders they produced. The nondefective eink screens unaccounted for can be attributed to Amazon.com and other eink companies like Kobo. At that point they might have to do a little guesswork to determine Kobo's marketshare, but assuming that it is fairly small, they can get a rough estimate of how many ereaders amazon sells. Consumer surveys can also help, as well as determine the percentage of defective kindles.

Note, I am not saying this is what they do. I am not an analyst, just a lowly grad student in the humanities. But I presume that there are ways they accurately estimate the number of ereaders and ebooks sold.

What is even more impressive to me is the astounding growth of amazon, even in a stagnant economy. Their revenues are growing 30-40% a year, even as the overall economy is only growing 2-3% a year. At first, I was doubtful about the claims of the article, because 6.1 billion dollars at 9.9 percent would mean that Amazons revenues in 2012 would be 61 billion dollars, a growth of 80 percent over their revenues of 34 billion dollars in 2010, which I didn't think possible. Yet, from a quick google search, I see that Amazon's revenues are consistently growing 30-40% over previous year quarters, and its revenues are expected to be 100 billion dollars by 2015. To put that in perspective, Target, the second largest retailer, has revenues of about 68 billion dollars, so in the next three years Amazon will be the second largest global retailer, far behind Wal Mart, which has annual revenues of 420 billion dollars.

[Daithi]

Kindle Will Be 10% of Amazon Sales in 2012

What is it now?

Let's say that all book sales represent 1/2 of Amazon sales. Amazon has already said that they are selling more ebooks than paperback and hardbacks, so ebooks must be at least 1/3 of their book's sales. This means ebooks should already be over 16% of sales (1/3 of 50%) and probably a lot higher because I've been conservative in my estimates here (books are probably closer to 75% of their sales).

Obviously they must mean sales revenue and not sales volume. However, I'd be even more interested in what percent of their total profit margin is attributed to ebooks. Too bad Amazon doesn't release figures investors can actually use -- then again they don't have to because there is no shortage of investors willing to buy Amazon stock based on the info they do release.

[crich70]

Originally Posted by SensualPoet

According to Mahaney, the Citi analyst quoted: "The number of Kindle books sold this year will increase to an estimated 314 million, from 124 million in 2010. And Mahaney expects that number to grow another 140 percent in 2012 to 752 million."

Momma! That's a lot of electrons changing hands!

In yesterday's Amazon Annual Meeting, Jeff Bezos said the company is selling more ebooks -- units sales and revenue -- than pbooks ... even while pbooks continues to grow in unit sales and revenue. Slice and dice Amazon's data any way you like ... it's a remarkable business that did not exist four years ago and was barely a blip two years ago.

The analyst also estimates that the installed base of Kindles at Jun 2011 is 15.5 million and that this will grow to 26 million by end of year 2011. Put another way: Amazon is shipping/selling 60,000 Kindles every day to end user consumers either directly or through its associate sales channels.

Amazing.

I wonder if that includes sales of the KSO units that occur at places like Wal-Mart. For a while now they've had the Nook and other ereaders on display in the electronics section at Wal-Mart and the other day when I was there (I get meds through the pharmacy) I was walking round while waiting for my meds to be ready and noticed that Kindle has finally infiltrated Wal-Mart's electronics section.