Amazon: A Kindle Under Every Tree?

Barnes & Noble (BKS) reported Friday that its new eReader product has sold out of the entire supply for delivery before the holidays. This may be a positive sign for Barnes & Noble in the long run as demand appears to be quite strong, but it is clear that production limitations are restricting sales this holiday season.

On Thursday, Sony (SNE) pushed back the shipping date for its Daily Edition Reader to between December 18th and January 8th. This puts Sony’s August promise to have the Reader available for holidays in serious jeopardy.

All of this is great news for Amazon.com (AMZN) and its Kindle device, and these delays are just another reason why it is great to be the among the first products to market and letting the others play catch-up.

Amazon is ready to roll with Kindles in stock and ready for sale in the rapidly growing segment of consumer electronics. There is no doubt that the holiday shopping season is of massive importance to a consumer electronics product, and eReaders should be some of the hottest gifts on the market. It appears that this will be another step forward in their market leading position, and it is a lost opportunity for the competitors. It is too early to tell if BKS’s Nook or Sony’s Reader will be the equivalent to Microsoft’s (MSFT) Zune, but extending Amazon’s lead is troubling.

The Kindle has a year head start on its primary competitors; remember, it was the Kindle that sold out prior to last year’s holidays. Sony has other models of readers available already, but the Daily Edition Reader is the closest competitor to the Kindle. It is also a bit surprising that a seasoned electronics manufacturer like Sony would be caught off guard by supply chain and manufacturing hold ups. For Barnes & Noble, it is much more understandable given their history as a retailer.

All the while, Amazon.com’s stock just continues to set new all-time highs which is truly amazing considering the stock was under $40 less than a year ago. Now trading at nearly $130, we are reiterating our Fairly Valued stance on the company. The Kindle has been a hit thus far and has the potential to dominate the digital book market the way the iPod has for digital music. We all know how that has worked out for Apple (AAPL) in the last decade. Not to mention, Amazon’s ecommerce site has never been hotter and should be a major destination for holiday shoppers.

Original post

Comments

[j-dub]

Under EVERY tree?

Oh yes, the 17.5% American that are unemployed are buying $250+ Kindles to read all about the seemingly irreversable predicament they're in.

2009 Nov 20 06:08 PM

[tunaman4u2]

The commercial for the Kindle is AWFUL...
I was watching it with someone & asked them after wards what the commercial was for... they had no idea... they said Amazon?

No clue what the Kindle was, what it does etc.

2009 Nov 20 06:17 PM

[Harry Tuttle]

It better be good for amzn. The stock discounted a kindle under every tree at $80

2009 Nov 20 08:32 PM

[Harry Tuttle]

Sorry. I didn't realize this comment was a commercial

2009 Nov 20 08:33 PM

[mollytjm]

why would anyone buy the Kindle for that price when they can get an iTouch that does the same thing and about a zillion other things? And the reading experience is terrific on it. audiobooks are wonderful too.
i think this article must be an ad or something.

2009 Nov 21 08:59 AM

[GSlusher]

Three reasons, I would suppose (though I agree with your conclusion):

1. Larger, higher-resolution display, so it shows more of a page.
2. Cell-phone connection to get books, though getting them through Amazon's web site wouldn't be too inconvenient, as long as one has Wifi available.
3. Longer battery life, as the display itself doesn't require power unless you're changing a page.

A quibble: there is no such thing as an "iTouch," despite what some lazy columnists write. Apple sells the "iPod touch." It's like calling a car a Toyrolla.

Edit: as I recall, the Kindle also plays audiobooks.


On Nov 21 08:59 AM mollytjm wrote:

> why would anyone buy the Kindle for that price when they can get
> an iTouch that does the same thing and about a zillion other things?
> And the reading experience is terrific on it. audiobooks are wonderful
> too.
> i think this article must be an ad or something.

2009 Nov 21 10:18 AM

[Fremont Real Estate Realtor]

Even though I don't think it'll be used much, after I by it, I'm intrigued by the Kindle and I'm hoping they'll drop the price under $200 this Christmas.

2009 Nov 21 10:37 AM

[rrtzmd]

..."Barnes & Noble (BKS) reported Friday that its new eReader product has sold out of the entire supply for delivery before the holidays."...of course, they neglected to mention they only had one unit in inventory to begin with, so selling out wasn't all that hard...

2009 Nov 23 09:20 AM

[rrtzmd]

...$250?...hmmmmm...think about it...it's a lot smaller amount than what you might think initially...that's about what I spend on groceries for a family of four each week...and compare it with what a lot of the other "toys" cost as well...and it's a lot more useful than most of those "toys"...


On Nov 20 06:08 PM j-dub wrote:

> Under EVERY tree?
>
> Oh yes, the 17.5% American that are unemployed are buying $250+ Kindles
> to read all about the seemingly irreversable predicament they're
> in.

2009 Nov 23 09:30 AM