Analysts Drinking Badly: Kindle Profit Nonsense

This incomprehensibly strange analysis of the potential for the Kindle strains the technological imagination.   The idea that this device doesn’t suck is foolish enough, but more importantly it can’t possibly have half the sales of the wildly popular iPOD, which debuted to considerably more positive press than the Kindle.

I think the problem is the notion that average folks might buy a Kindle.  They *might* buy a smartphone someday and probably will buy a computer, but they won’t be buying many Kindles.

Is there evidence that people really are buying Kindles?    Actually, very little.  Amazon has very conspicuously decided not to share sales stats, so only rumors have fueled speculation that Kindles are flying off Amazon’s warehouse shelves in numbers approaching the 55,000 used in the above mentioned crazy analysis.

Yes, it is possible that Amazon is making a killing with the Kindle and that they have chosen to remain very quiet about this, but it’s pretty darn unlikely.    I’d guess these things really are happening:   1) They are stockpiling in the hopes this will be a 2008 Christmas hit (it will not) and 2) they are promoting the heck out of this at trying to build a market (this will fail) and 3) they are engaging in somewhat deceptive practices to maintain the pretense these are selling lots of Kindles and will sell a lot of them in the futurel (this may not even be legal as SEC rules don’t look favorably on things that could be seen as mechanisms of stock price manipulation).

13 thoughts on “Analysts Drinking Badly: Kindle Profit Nonsense

  1. Is the iPhone mainstream? (serious question) I believe it is, although might be convinced that it isn’t. The Kindle in it’s current form definitely isn’t mainstream – but from the reviews I’ve read, it isn’t just tech early adopters buying and loving it, which bodes well for it. While I don’t know much about the financials they talk in the piece, it’s undeniable that it has been selling well for Amazon – I’ve never seen it drop lower than the #2 best selling electronics device, even when it was indefinitely sold out.

    I’d like to think if they keep rev’ing the hardware, by a gen3, adoption could be much wider. And hopefully as its installed base grows so will the depth of it’s bookshelf. Of course, the cycle could turn vicious if numbers finally are revealed and are much lower than expected. But I’d like to be an optimist on this. 🙂

  2. “…I’ve never seen it drop lower than the #2 best selling electronics device, even when it was indefinitely sold out.”

    That is truly hard to believe – not that it was what you saw, but that it was not “adjusted”. No rules, laws, etc. that I know of that say you can’t handcraft those sorts of things. . .

    Boy the conspiracy theorist in me really jumped out of my mouth just then….. 🙂

  3. Felix iPhone not mainstream but iPODs are. Even if Kindles sell like iPhones, which I also think is optimistic, these projections would be way high as well.

    Metro my gut says that Amazon is working hard to pretend these are popular and probably doing some deep misleading. I certainly have not studied this a lot but the gut check says they initially made a handful, sold out after selling a handful, and are now pretending it’s a big thing. But now heading to see if there are any decent sales stats.

  4. yeah ya know, if you don’t get good press from elsewhere, might as well start at home 😉

    I have to say, Felix’s comment got me thinking…is there really a comparison b/w the iPhone and the Kindle? I mean the iPhone is everywhere in my experience, particularly in both tech and non-tech circles, vs. the Kindle that I only see on tech Web sites (occasionally) and Amazon itself. BUT, what if Kindle really does have the kind of momentum the iPhone, iPod, etc. have?

  5. Metroknow it is possible that Kindle sales are off the charts but I think it would be unprecedented for a company to keep that much success a secret. Why?

    I see iPOD and iPHONE as very different tech animals. The first has huge and heavy adoption, the second smaller and much more focused. There’s a price barrier issue as well.

  6. Kindle???
    Okay, so I went to Amazon’s website and glanced at its description and it sort of seemed to be just what I had guessed you people were talking about.

    Don’t you just wish a product like this would fly off the shelves into all those idle hands of the younger generation who seem devoted instead to listening to music all the time? Don’t you just wish they would start reading a book instead or atleast a magazine?

    What is the Kindle? A portable magazine rack that might be found in a doctor’s office or a portable library? Ain’t gonna go flying off the shelves till people see the display features and ain’t nobody but these dotcom millionaires gonna shell out four hundred smackers so readily.

    What can be read on Kindle that can’t be read on a portable computer? Ultra thin laptops would be able to do all a Kindle can do and more.

    What am I missing here? What can a 400 dollar Kindle do that is supposedly so special?

  7. FG you are not missing anything, and I particularly agree that more prominent will be the coming plethora of portable devices that do all the kindle does AND let you read email and surf the internet (which you can’t with Kindle).

    If they could make this cost $99 I think there might be market for Kindles as your carry along substitute for a … ummm…. real book.

    Mom, the baby just dropped your Kindle in the swimming pool

  8. Consider the command system in unix: each command must do one thing, it must do it well, it may have various options such as a reverse sort, but the sort command must do one and only one thing: sort!

    Now consider the bloatware, gold-plated nonsense the pentagon is so fond of: has to do everything with bells, whistles, doodads and reports in triplicate to the pentagon.

    So maybe there would be a market for a device that does one and only one thing: it Displays! A super high quality display device might indeed go flying off the shelves, but not at 400 dollars and not as a device that has high quality displays of only limited items.

    People seem to be twittering alot these days, reading email, listening to voice mails, playing video games and obsessively listening to music, yet 400 dollar Kindle-books are supposedly flying off the shelves? Its not happening in the “bricks” and I don’t think its happening in the “clicks” either.

  9. I think that Amazon has missed the boat on this. The majore problem for me is not the price, although it is steep, but the greediness of limiting downloads to those sold by Amazon. If you want to sell razor blades then you should price the razors low. Amazon charges 400 dollars for the razor (the player) but then charges 10 dollars for each book and does not allow you to download such free media as the Gutenberg projects ebooks. When something similar comes along for about 100 dollars without restrictions on downloads I shall be happy to buy one.

  10. Pingback: 240k Kindles with books on the wall, 240k Kindles with books « Joe Duck

  11. Pingback: El sueño de Kindle | PuroPeriodismo

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