Kindle Review – Kindle 2 Review, Books

The general consensus seems to be that the Kindle is selling so-so and is not a big success like the iPod was when it first came out.

A fair iPod vs Kindle comparison ought to consider -

1. That the iPod is in year 7 of its development. It was released in the end of 2001.
2. That the music and book industries are different.
3. The Kindle is in just year 2 of its development (released end 2007).
4. The contrast between the 2001 onwards economic and technology climate with 2007 onwards.

We’ll leave out the ‘music industry vs books industry’ and ‘2001 climate Vs 2007 climate’ factors for now, and just compare sales of the iPod and sales of the Kindle in their first couple years of existence.

iPod Vs Kindle – Comparing the first 2 months.  

iPod 2001: 

1. Pre-History- Jan 2001: iTunes released.  
2. Nov 10, 2001: iPod launches. It’s $399, has 5GB Memory and holds 1,000 songs. Mac only.
3. 2001: Apple sells 125,000 iPods (from Apple earnings release).

Kindle 2007:

1. Pre-History - Amazon.com and associated benefits. 
2. Nov 19, 2007: Kindle launches. It’s $399. Sells out quickly. Waits of 4 weeks or more.
3. 2007: Kindle Sales figures undisclosed. Estimates vary

iPod Vs Kindle – The first full year.

iPod 2002: 

1. Mar 20, 2002: Apple announces a $499 iPod with 10 GB Memory. Mac only.
2. Jul 17, 2002: 4 new iPods and PC support. Prices of earlier models drop $100 each.
3. Oct 2002: iPods selling at Dell, Best Buy, Target.
4. 2002: Apple sells 468,000 iPods (from Apple earnings releases).

Kindle 2008:

1. Kindle sold out for all of the 1st quarter. 4+ week delays throughout.
2. April 28, 2008: Kindle back in stock.
3. May 27th, 2008: Kindle price cut to $359. 
4. Oct 24th – Oprah endorses Kindle and $50 Kindle coupon is released. Interest and sales skyrocket. 
5. Nov 1st – Kindle sold out. 2-3 week delays that last until the introduction of Kindle 2 in Feb 2009.

iPod Vs Kindle – The second full year.

iPod 2003:

1. April 28, 2003: Apple announces the third generation iPods and the iTunes Music Store for Mac. 99 cents per track and $9.99 per album pricing in the iTunes store. Capacity of each model increases.
2. June 23rd, 2003: Apple sells the 1 millionth iPod.  
3. First 9 months 2003: 718,000 iPods sold (from Apple earnings releases).
4. Last 3 months 2003: iPod really takes off. 733,000 iPods sold in Holiday Season 2003.

Kindle 2009:

1. Feb 2009: Kindle 2 is announced and then releases. Sales and interest spike and stay high. Post Kindle 2, 35% of sales for books available in Print and Kindle editions are of the Kindle edition.
2. May 2009: Kindle DX is announced.
3. June 2009: Kindle DX launches. Sells Out – initially 1 week delay, and currently (July 2, 2009) 3-5 weeks delay. 
4. 2nd Half 2009: Open.

Kindle Vs iPod – Comparing Sales

First, iPod Sales Figures: 

It’s interesting to note the sales pattern of iPods in the first 2 years after release (courtesy Wikipedia) -

Year	Q1	Q2	Q3	Q4
2002	125,000	57,000	54,000	140,000
2003	219,000	78,000	304,000	336,000
2004	733,000	NA	NA	NA

These are based off of Apple Sales Earnings and are pretty accurate.

Kindle Sales Estimates:

1. May 2008: Mark Mahaney estimates Kindle sales at 10,000-30,000 units and 198,000 by end of 2008. 
2. Aug 2008: TechCrunch claim inside information putting Kindle sales at 240,000.
3. Mark Mahaney revises estimates to 390,000 by end 2008.
4. My own estimate range for 2008 is 240K to 600K Kindles sold with 500K being the figure I’d put my money on.
5. Feb 3rd, 2009 (Pre-Kindle 2): Mark Mahaney estimates 500K Kindles sold to date. Justin Post from Merrill Lynch estimates 374,000 Kindles sold.  
6. June 30th, 2009: Mr. Friedland of Cowen & co. estimates 800K Kindles have been sold to date. He also estimates that 340K Kindles were sold in 2008 and 900K will be sold in 2009.  
7. My estimate for Kindle sales by now would be higher - 1.25 million Kindles (with a range of 1-1.5 million Kindles sales).

Comparing Kindle Most Probable Estimates with iPod Sales figures:

1. In the first 1.25 years (through financial Q1, 2003), iPod had sales of 595K units. The consensus most probable sales estimate for Kindles is 500K.
2. In the first 1.75 years (through financial Q3, 2003) there were a little over a million iPods sold. For the first 1.75 years (up till now) our Kindle sales estimate range is 800K (analyst estimate) to 1.25 million Kindle sales.

Whichever way you look at it, Kindle sales are keeping pace with iPod sales. Factor in that Kindles have been sold out for 7+ months out of these 1.5 years (Dec 2007 to Apr 2008; Nov 2008 to Feb 2009) and Kindle sales look even more impressive.  

Information on the iPod’s early development and the sales estimates are courtesy iLounge’s excellent iPod History post and Wikpedia’s excellent iPod Sales Charts.

Closing Thoughts on iPod Vs Kindle Sales

The 3rd version of the iPod is the one that really made the iPod a hit. It was introduced in April 2003 (beginning of Q3 of fiscal year 2003) and iPod sales never looked back after that -

We’ve seen that 1.5 years into its development the Kindle is keeping pace with the iPod.

There are numerous reasons this might be meaningful -

1. Books market smaller than music so larger percentage share.
2. Kindle content generates more revenue.
3. Kindle screen technology still evolving.

And numerous reasons it might mean nothing -

1. Books market could be too small to support an iPod like growth.
2. Kindle sales might never hit the magic jump iPod sales did. 
3. A competitor kills the Kindle by releasing a better eReader.
4. A competitor like Google stalls Kindle growth by hijacking content sales.

However, it’s interesting to note how close iPod and Kindle sales are and how crucially important it will be for Amazon to release a great Kindle 3 and have enough Kindle 3s in stock if it wants Kindle to become the iPod of the Books World.