Is Amazon's Kindle Outpacing Early iPod Sales?

When the Kindle sold out during the holidays, I guessed that Amazon (AMZN) would end the year selling 500,000 of its electronic books. All I did was roughly double the 240,000 that had sold through the middle of the summer. But now Citi analyst Mark Mahaney has come to the same conclusion, using better data.

In a note Wednesday, he cites some numbers in Sprint’s (S) 10Q filings that indicate 210,000 devices were activated in the third quarter, and 100,000 each in the first and second quarters. (Each Kindle downloads books wirelessly using a built-in Sprint EVDO antenna). In addition to the 410,000 activated Kindles during teh first three quarters, he estimates that Amazon shipped a total of 500,000 activated Kindles before selling out in mid-November. (Oprah had something to do with that). If it hadn’t sold out, Mahaney thinks Amazon could have sold 750,000 Kindles in 2008.

But even the 500,000 estimate would mean that the Kindle is outpacing iPod unit sales in the iPod’s first full year on the market, when it sold only 378,000 units. That means if you turned back the clock and launched both at the same time, the Kindle would be outselling the iPod by 32 percent. Mahaney estimates that total revenues (devices plus electronic books sales) reached $153 million in 2008, but will grow nearly tenfold to $1.2 billion in 2010. That’s a steep ramp.

Good thing Amazon is getting ready ready to announce the second version of the Kindle on Monday. Below is Mahaney’s updated model.

Original post

Comments

[20smoney:]

Kindle is selling like hot cakes yet I never see ANYBODY with one. I'm not a believer in the Kindle story. Who wants to carry one of those around?

Feb 04 10:19 AM

[The Steenma...:]

Not sure if that's a fair comparison. My recollection is that the iPod was initially Mac-only, thus much more limited in potential buyers, as opposed to the Kindle, which anyone can buy. I think a fairer comparison would be total sold in 1st year vs. total available market. I think you'll find the adoption rate is higher for the iPod. Of course, to increase its market reach Apple made the iPod compatible with windows in 2002 via MusicMatch, I believe, and iTunes later. The 2nd year sales would be a better barometer.

And I agree with 20smoney. I have yet to see one, even though this thing gets rave reviews.

Feb 04 10:34 AM

[ermmm:]

Comparing the digital market place of October 2001 to February 2009, what the?

The Kindle is a niche player at best and benefits from the iPod bringing portable digital content to the masses. Also the Kindle is going to have to compete with the iPod Touch, iPhone, and other large screen portables.
iPod Touch and iPhone have Apps for books now making those devices not only iPods, internet devices but also book readers.

As my buddy Alton Brown says "Who needs a uni-tasker?"

Feb 04 10:49 AM

[Throckmorto...:]

Why are you limiting this analysis to iPod sales? Apple sold 10 million iPhones in 2008, and are expected to sell 28 million units in 2009.

Feb 04 11:03 AM

[SKR, MBA:]

Did you decide to write this piece 5 minutes before deadline? Your premise is as faulty as a sub-prime loan.

You completely discount that Apple single handedly defined and created the digital download market. They blazed the trail for everyone else. Why not ask yourself: Why didn't Amazon launch at the same time as Apple's first iPod? Could it be that they didn't have the technology? Could it be that they didn't know how to do it? Could it be that the mobile carriers didn't have the infrastructure to carry the bandwidth, and wouldn't have until Apple mobile devices demanded it?

If you intend to make an Apple pie, don't try to make one with oranges....

Feb 04 12:25 PM

[stop_pumpers:]

Apple has the expertise to design and manufacture complex electronic devices.

Amazon is an extremely low (getting lower) margin retailer that pretends to be a technology company.

Why not do an article on Amazon's DVD sale (which made their numbers last year) that would only pass the smell test with accountants from Enron?

Feb 04 02:02 PM

[parv:]

the original ipod was mac only so the author is not comparing like with like.

parv


On Feb 04 10:34 AM The Steenmachine wrote:

> Not sure if that's a fair comparison. My recollection is that the
> iPod was initially Mac-only, thus much more limited in potential
> buyers, as opposed to the Kindle, which anyone can buy. I think
> a fairer comparison would be total sold in 1st year vs. total available
> market. I think you'll find the adoption rate is higher for the
> iPod. Of course, to increase its market reach Apple made the iPod
> compatible with windows in 2002 via MusicMatch, I believe, and iTunes
> later. The 2nd year sales would be a better barometer.
>
> And I agree with 20smoney. I have yet to see one, even though this
> thing gets rave reviews.

Feb 04 02:05 PM

[another.ana...:]

The author's an idiot.

Case closed.

ayuh

Feb 04 02:11 PM

[jenny:]

I've never even seen a Kindle in real life, who is buying these?

Feb 04 02:38 PM

[RLLH:]

I suspect the Kindle appeals to the intellect rather than to emotion. Thus it is no surprise that most I-pod users have never seen a Kindle. As JW says, we will never see kids carrying something whose role in life is to force one to read.

Feb 04 04:01 PM

[Hayweed:]

I bought my ipod on October 23, 2001 after pre-ordering it from a small apple computer shop. No apple stores back them. It cost $400.00 which was a ton of cash in 2001. Needed firewire which few computers had. Mine didn't. No itunes and nobody made skins or wireless transmitters or extra headphones. Only worked with the mac which had such a small market share that many thought they would fold. Comparing the kindle to that is a joke.

Best thing about it is that it still works. Anyone think the Kindle will work in 2016. Doubt it.

Feb 04 04:58 PM

[WhatAnIdiot:]

Your evidence is circumstantial. Its not an apples to apples comparison in the slightest. Did you wake up and realize you had nothing to write about and then.. make some random crap up?

When the iPod was very first release it was mac only. Which is important here. And at that time mac market share was lower. Which is also relevant here.

And.. of course.. no mention of all the books that are sold for the iPod touch and iPhone. Had those not been available, kindle sales may have been higher.. or more rapid.

What do you people do? Just sit around.. trying to think of random crap that you can draw some some seeming reasonable but totally skewed conclusion and then write an article?

Wow. I want THAT job.

Feb 05 03:17 AM

[parv:]

why can't this author admit that he has made a mistake in his reasoning by not comparing like with like, or if he thinks he is still right explain why the arguments against him are wrong.

Feb 05 05:35 AM

[mollytjm:]

ok...i'll answer the question...who uses the kindle? it's heavily used by older people who don't have a computer either because they can't afford one or are afraid of them. Oprah hawked the Kindle on her show and my 78 year old friend (computerless) called me to help her buy it on Amazon!
and i found out she knew other people like her doing this because they can't hold a heavy hard back book anymore, especially the large print ones (which are gigantic) and they don't have a computer.
but i can assure you that you won't find many younger people using a kindle! you can download books to an iTouch and iPhone and they're very easy to read there. and it's easier to carry around and neither is a one trick pony, like the Kindle. But you can also download audio books to all Apple products.
so the Kindle has a niche but it's not a threat to the iPod, iTouch and iPhone (or Mac). You can't compare the Kindle just to an iPod... it's up against ALL Apple products.

Feb 05 10:50 AM

[RECON605:]

The price has to drop in order to draw more attention.

Also, the Kindle needs to be out of the hands of Amazon, who likes to invade people's privacy in order to really grow the market.

Sony are u reading this?

Feb 05 04:59 PM

[brewer:]

I know a guy that has one. He is computer illiterate. It does have a nice (albeit b&w) screen, but the rest of it has a very cheap feel to it. I would rather read from the iPod touch or iPhone. In fact, my MacBook Pro is as portable as the Kindle.

Feb 05 05:40 PM