The Strange Case of Dr. Kindle and Mr. Bezos

I bet you didn’t know what Amazon’s (AMZN) e-book reader, the Kindle, was even around a year ago. Hell, most people probably didn’t know what it was until Oprah called it one of her favorite gadgets back in October. And now the general consensus is that the Kindle is a big hit. Some are even calling it the iPod of the book world—high praise for a product that we really don’t know much about.

For starters, no one really knows how well it’s sold. All the numbers you see touted in the press are just estimates because Amazon isn’t releasing the numbers. To me, it feels like everyone’s drinking the Kool- Aid. They don’t release ANY numbers and expect us to just swallow that the Kindle was the best-selling electronic device of 2008 (on Amazon)? It feels a little too Big Brother for my taste.

If things are so rosy, why not show off the numbers? Well, there are theories out there that Amazon CEO Jeff Bezos has some big announcement up his sleeve. You know how secretive people get before a big announcement, right? Sounds similar to Apple’s (AAPL) style of biz—I wonder if Bezos is trying to pull a Steve Jobs.

Anyway, while the Kindle hype is pretty exciting to follow for a gadget hound/book nerd like myself, the investor in me isn’t buying it until I see some numbers that back up all the hype. And I don’t necessarily mean official sales numbers either: I’m talking WeSeed-style numbers. I’m talking keeping your eye on the street.

Have you seen a Kindle “in the wild” anywhere? Think about the last time you were on a plane, train, or bus. How many people were staring rapt at their Kindles? I’ve seen exactly one. That makes me think that, sure, it could be selling like crazy—but nowhere near iPod territory.

Then again, remember the first time you saw an iPod? And then in no time at all everyone had one? Maybe the hype will prove to be true, but until I see more people rockin’ Kindles in coffee shops and on the train, I’m not touching Amazon’s stock if we’re talking solely about the Kindle effect.

As for Amazon overall, their numbers came out today and they had a great holiday season—the stock has responded by jumping up 18% so far.

What’s your take on the Kindle? Does it have iPod-esque potential to blow up in popularity, or will it simply blow up? And does it even matter with how well Amazon as a whole is doing?

Comments

[Lincolnpark:]

I've had a Kindle since last January and love it. I use it mostly for newspapers, blogs and magazines (I get my Boston Globe wirelessly every morning wherever I am!), but I have also bought quite a few books. The first version has some usability problems which appear to be fixed in the new one and the product has been in short supply with a long wait for delivery all year. If Amazon can get the supply chain filled, I think it is a winner (but likely not an I-Pod class of product due to the decline in literacy relative to music and video).

Feb 10 08:29 AM

[Carlos Port...:]

@Lincolnpark: How do you feel about yesterday's announcement of the Kindle 2? Seems like a hassle to be updating this kind of device all of the time like a cell phone, but I'm guessing there's really no need if you're happy with the original.

Feb 10 09:38 AM

[mrsmarks:]

I live in Manhattan and have seen a Kindle in use only once, which surprises me.

Feb 10 09:54 AM

[User 354307:]

SoCal, and have never seen a Kindle.

Feb 10 09:59 AM

[Roger Knights:]

It's not going to take off like a rocket, IMO. But I think it ought to grow pretty nicely--doubling its sales every year, perchance. E.g., from say 500,000 in 2008, to 1M in 2009, then 2M in 2010, etc. Five years from now, it’ll have lots of presence.

Feb 10 11:30 AM

[Mike X.M. Fade:]

Amzn and Kindle is like sattelite radio, great idea on paper but execution is tougher. We're in one big depression, don't see a strong consumer, only hungry governments in search of tax dollars. Also, see big inflation in our future. Combine all of these factors, I see slower sales for AMZN, tighter margins due to sales tax adjustments coming soon and higher costs for delivery. AMZN is a retailer in a depressionary environment, sell into hope, short into strength.

Feb 10 07:38 PM

[Mike X.M. Fade:]

Also, the strong sales for Christmas season will not repeat for the first qtr of 09, you are about to see the slow down affect amzn now, this quarter is a good time to sell before amzn reports


On Feb 10 07:38 PM Mike X.M. Fade wrote:

> Amzn and Kindle is like sattelite radio, great idea on paper but
> execution is tougher. We're in one big depression, don't see a strong
> consumer, only hungry governments in search of tax dollars. Also,
> see big inflation in our future. Combine all of these factors, I
> see slower sales for AMZN, tighter margins due to sales tax adjustments
> coming soon and higher costs for delivery. AMZN is a retailer in
> a depressionary environment, sell into hope, short into strength.

Feb 10 07:45 PM