Kindle Review – Kindle Fire Review, Kindle 4 Review

In the wake of Amazon’s still-hard-to-believe ‘we’re selling more ebooks than hardcovers’ announcement there are a lot of people claiming it’s all sleight of hand. Here are the various things being written -

1. That the entire increase in ebook sales is due to Kindle ebook sales through the iPad. These are the same people who thought no one would use Kindle for iPad because it didn’t have pretty revolving book shelves. 
2. That Amazon has lost out a lot of the hardcover market. They’re trying to rationalize some strange phenomenon that caused hardcover sales to migrate from Amazon to another site.  
3. That most of the sales are of self-published books under $5. If true, this should be exceptionally worrying to Publishers – not only are they losing hardcover sales to ebooks, they are losing them to ebooks from self-published authors.

Everyone’s trying to come up with a theory that lets them rationalize away reality and go back to being complacent.

The reactions highlight why Amazon should continue to keep Kindle sales figures and Kindle book sales figures secret.

You cannot fight what you cannot see

Consider all the enemies Amazon has and how they’re completely clueless about the eReader space -

1. Barnes & Noble had no idea how many Nooks to produce and sold out during Christmas season 2009. They handed over the single most important shopping season in the history of eReaders to Amazon. 
2. The Press have no idea how many Kindles have been sold so they can’t attack. The Press take even positive figures and find a way to paint them as negative. Without numbers they are completely powerless.  
3. Apple has no idea of how many Kindle books are being sold via Kindle for iPad and Kindle for iPhone. If Amazon did in-app purchases then Apple would know. If Amazon revealed Kindle sales figures or Kindle book sales figures then Apple could try to extrapolate figures and decide whether to cut out Kindle Apps.
4. Sony also had no idea of market demand and sold out of the Daily Edition during Christmas season 2009. 
5. Publishers know ebook sales are increasing – they don’t know which parts of the Kindle ecosystem are contributing the most and they don’t know what share smaller publishers and indie authors are getting.
6. Companies that are thinking of entering the eReader space have no idea whether they should build apps or build a dedicated device. They might enter with a dedicated device and find Kindle Apps for PC and Mac are the biggest sources of ebook sales.
7. Companies entering the eBook space have no idea what the most important channels are. Imagine you’re trying to sell ebooks and you have no clue whether to invest in iWhatever apps or PC apps or to build your own reading device.

It really helps that both B&N and Sony are also refusing to discuss figures. This means we currently have zero idea of what’s going on.

Of course, you can guess and there was a very intelligent comment by eal which estimated 4.4 million Kindles sold so far -

so if we assume say 20% of Kindle owners bought a Patterson ebook (and they each bought just one) you have ~4.4M Kindles in circulation. Other assumptions will give you other ballpark SWAGs at Kindle volumes.

That’s probably pretty close to being accurate. Thankfully, the Press and Amazon’s enemies seem incapable of doing basic guesstimates. At some level, even intelligent guesses might not be enough.

Uncertainty paralyzes

Uncertainty really throws people off. It seems like it’s not a big deal but the reason it kills planning is that we are wired for a world where not knowing the exact location of the prehistoric tiger meant you couldn’t go hunting. The ones who did – well, their genes aren’t around to fearlessly take on uncertainty.

People feel compelled to eliminate uncertainties before they proceed. If they assume 4.4 million Kindles and produce 3 million they might be left with 2.5 million on hand. If they assume 1.5 million and it’s actually 4.4 million they may sell out and lose out on this holiday season.

The situation is so bad reporters are trying to use the argument that more people are reading Nook reviews than Kindle reviews on CNet.com and claiming that means Nook must be selling more than the Kindle.

Think about that for a second – People are using the number of times reviews are accessed on a non-Amazon site to try to figure out how well the Kindle is selling.   

Amazon doesn’t need social proof with Readers

A lot of the times companies flaunt their sales figures because their products are products that sell on social proof. If 5 million people have bought it it must be good.

People who read are different. If their sole focus in life was following the herd they wouldn’t be reading books. Plus reading books makes people pretty resistant to marketing and influence in general. What marketer can write as well as Shakespeare?

Of course, Amazon keeps throwing in little assurances every 3 months – millions of Kindles sold, ebooks selling more than hardcovers. However, you almost feel it’s more for the stock price than for readers.

There are very few markets that care as little about numbers

Readers are very indifferent to trends and popularity – If they were fixated on doing the ‘popular’ thing they would have all left to go watch TV. Their only concern is whether the Kindle adds value and whether it’s going to be around and not disappear with their books. Those concerns are addressed by the Kindle being very good value for money, Mr. Bezos saying there’ll be a Kindle 10, and by the fact that there are a constantly increasing stream of Kindle Apps (which you can read your books on) acting as insurance.

As far as readers are concerned the whole ‘social proof’ thing doesn’t really matter. So secrecy isn’t hurting Amazon’s sales and it’s helping it throw off competitors. 

Secrecy gets Amazon lots of free publicity and it gets its enemies upset

Any Kindle announcement by Amazon is covered twice – First, the articles by people who are surprised Kindle and Kindle store are doing well. Second, we get a round of articles claiming it’s all a magic trick.

It’s tens of millions of dollars of free publicity. An article that uses some ridiculous argument to try to fight off the Kindle’s relentless rise is the best advertising. It instantly makes people wonder about the product and check it out.

A nice side bonus is that it gets anti-Kindle people really upset.

Emotional enemies are weak, stupid enemies

When the Press and other anti-Kindle people get upset good things happen - Their anger clouds their thinking and they end up showing their inherent biases and negativity.

Take the person who’s trying to use traffic at CNet.com to gauge Kindle vs Nook sales or the person who’s saying all the increased sales are due to indie authors – Those are two people who’ve shown that they will try to use any ridiculous argument to attack the Kindle.

Any one reading their posts is going to think – The Kindle must be doing well if they are using such vague, irrelevant arguments against it.

Secrecy might help Amazon win the 2010 Christmas Season

There are a lot of things Amazon is hiding -

1. Kindle sales.  
2. Kindle book sales.
3. When Kindle 3 will come out.
4. When Kindle will get color.
5. When Kindle App Store will be released.
6. The Kindle ecosystem is a moving target. It’s always adding new features. It’s always providing more value for money.
7. Amazon’s long-term plans are a secret.

Now consider the impact on all the eReader and eBook contenders -  

• Barnes & Noble and Sony don’t know how many units to produce.
• The various eReader entrants don’t know how many eReaders to manufacture.
• Tablet companies don’t know how much effort to focus on readers.
• eBook companies have no idea what to expect.
• No one knows where to attack Amazon – the Kindle? Kindle for iPhone? Kindle for PC?

We’re 2.5 years into the eReader market and the only thing we know is that the same Kindle that was supposed to not even sell 40,000 units has sold millions. That’s our single data point.

Secrecy is an amazing strategy

Your opponents know less about you than you know about them. Your enemies don’t know what to target. Rivals tend to overestimate you and fear you.

Lots of potential rivals never find out how promising your niche is. Let alone investigate the market they don’t even know it exists. The really dangerous companies stay out of your market longer than they otherwise would.

The Press gets obsessed and keeps writing and speculating about you. You get a ton of free publicity.

Keeping Kindle sales figures secret has been one of Amazon’s smartest moves and it’s almost certainly going to keep the numbers secret in future. Perhaps when Amazon’s position in eReaders and eBooks is secure (or when it can no longer hide the incoming profits) it’ll reveal details. For now, it’s happy to be playing the Press for fools.

Filed under: thoughts Tagged: | kindle secrets, kindle strategy