Thoughts on 12 million Kindles sold estimate

Stephen Windwalker at Kindle Nation has a very interesting set of Kindle Sales Estimates.

Here are the five figures that are most interesting to me –

  1. 1 million Kindles – March 2009 (Kindle 2 ships). Which sounds about right.
  2. 3 million Kindles – December 2009. This also sounds about right.
  3. 4 million Kindles – July 2010. Again, sounds reasonable.
  4. 12 million Kindles – January 2011. This is where it begins to seem super optimistic to me.
  5. 22 million Kindles – December 2011. Still in the super optimistic range.

An important disclaimer – No one except Amazon knows the exact figures. So optimistic speculation is just as valid as pessimistic speculation, and all estimates are just estimates.

The Critical and Critically Interesting Things

Although the 12 million Kindles sold so far estimate seems optimistic, and the 22 million Kindles sold by end 2011 estimate seems even more optimistic, the truly interesting things are –

  1. The Kindle sales trend. While no one agrees on just how many Kindles have been sold, almost everyone agrees that millions of Kindles have been sold and that sales are increasing.
  2. The belief that Kindle is a Runaway Success. Everyone believes the kindle sales figures are large, and that Kindle is outpacing all other eReaders.

These two things are far more consequential than exact Kindle sales figures.

Why it’s important that Kindle Sales are increasing

It doesn’t really matter whether 5 million Kindles have been sold so far, or 10 million Kindles have been sold.

All that matters is this –

  1. 2007 and 2008 – Hundreds of thousands of Kindles sold per year.
  2. 2009 – Millions of Kindles sold per year.
  3. 2010 – Millions of Kindles sold during Holiday Season.

The fact that the Kindle sales rate is increasing is hugely important. We know ‘millions of Kindles’ had been sold by end 2009. That means that if the sales keep increasing we’ll eventually hit ‘tens of millions of Kindles’ – At that point eReaders and the Kindle would be here to stay.

Why it’s important that everyone thinks Kindle sales are super high

Spreading and encouraging huge Kindle sales estimates is anchoring. People read the ‘8 million Kindles sold in 2010′ rumor (courtesy BusinessWeek), and see the ’12 million Kindles sold through January 2011’ estimate (courtesy Kindle Nation), and that anchors ‘Kindle is a Huge Success’ in their heads.

It gets other people to revise their estimates upwards. It gets people to write about it. It just keeps growing – this anchor of the Kindle being a huge hit with sales so shiny that no one can see the actual figures.

This is hugely beneficial to Amazon –

  1. When customers are deciding which eReader to buy, they automatically assume they should get Kindle – it might have sold 12 million units.
  2. When authors are deciding which platform to focus on, they choose the Kindle Store – since there might be 12 million Kindle owners buying books.
  3. When companies are wondering whether to get into eReaders, they get disheartened by the thought of competing against a company that already has 12 million Kindle owners in its camp.

It seems like a dream scenario for Amazon. Except, at some point it stops being sugar and spice and all things nice.

The Flip Side of the Coin

Amazon wants to have its cake and eat it too – It doesn’t want to reveal sales figures because its competitors might get the three witches from Hamlet to concoct a potion based on the magical figures. At the same time, Amazon wants to get the benefit and social proof of being considered the most successful eReader.

Where it could back-fire is if estimates get out of line.

We’ve jumped to 12 million in January 2011. By March 2011 we might be at 20 million. By end of the year we might be at 50 million. At some point the rumors and estimates will get out of hand and start hurting Amazon. It’ll be interesting to see what approach Amazon takes to avoid super-high estimates.

What do we know for Sure?

Not very much.

Just that Amazon has sold millions of Kindles. We really don’t know anything beyond that. Amazon is in love with the idea of sending out vague clues, but it’s all pretty meaningless.

If Amazon really had sold 12 million Kindles, you could have made a strong argument that Amazon would benefit a lot more from revealing that figure right now, than by continuing to hide it.

  • The iPad 2 is going to arrive soon. What better way to reduce the impact on Kindle sales than by revealing 12 million Kindles sold?
  • Nook Color is eating up the casual eReader market. There’s nothing better to fight it off than the social proof of 12 million Kindle sales.

Is secrecy a better option here? Not so sure.

Is Secrecy and pretend-Social Proof more powerful than Social Proof?

It’s contrasting schools of thought – Apple uses 7 million (or however many) iPad sales to beat people over the head and get them to buy the iPad. Amazon hides sales figures but uses strategic leaks to try to convince customers it’s sold 8 million or 12 million or 5,673 million Kindles.

The former uses certainty. The latter uses an open loop. Which is more convincing?

Well, my guess would be that the open loop (there might have been 8 million Kindles sold) creates more buzz and interest, but that the solid figure (7 million iPads sold) creates a lot more sales. People hate uncertainty – it gets them interested, and puts them in discovery mode, but it doesn’t necessarily get them into buying mode.

Has there ever been an electronic device that chose mystery over revealing solid sales figures? Can’t think of anything off the top of my head.

For a data-driven company, Amazon seems very strongly wedded to a strategy it couldn’t possibly have enough data on. Where are the prior examples of companies that kept sales figures secret, and ended up benefitting wildly from the secrecy?

Thoughts on various bits of Kindle, eReader news and speculation

The Kindle is again stirring up speculation of all sorts. There’s also some interesting Kindle related news.

Author finds a new way to market his book

An author at the official Kindle forum has found a new way to market his book –

  1. He announced 20 free copies – all he asked for, in return, was a genuine review.
  2. There were soon 250+ replies, with at least 100 people interested in reviewing the book.
  3. It’s gotten a lot of buzz. It might have cost him a few thousand dollars in advertising to get a similar level of publicity.

A good indicator of how competitive things are is that another half a dozen or so authors are now offering a similar deal. It’s less than a day, and already authors are copying what worked for one author. People are severely under-estimating how competitive things are going to be.

5.4 million Kindles and 4.5 million Kindles

Ming-Chi Kuo, former analyst at DigiTimes, and current analyst at Concord Equity Research, has this to say –

  1. 5.4 million Kindle 3s and Kindle WiFis sold since launch. 
  2. Amazon shipped 1.6 million Kindles in December – same as iPad. However, iPad sales in the winter quarter are expected to be between 5 and 10 million units. The shipments are down only due to iPad 2 being on the horizon.
  3. 4.5 million Kindles are expected to ship in Q1, 2011. That seems an awfully optimistic estimate. Unless there’s a new Kindle, it might be hard for Amazon to sell 1.1 million Kindles a month.
  4. 12 million eReaders have been shipped so far, and another 27 million eReaders will ship in 2011. Another very optimistic estimate – almost bordering on the unbelievable.

Thanks to Apple Insider for the scoop.

B&N might have two eReaders lined up – Nook2 and Nook Kids

PocketNow has the news that B&N is applying for a lot of new trademarks. There’s some intelligent speculation – Evan Blass at PocketNow points out that two of the trademark applications seem to be for new devices.

  1. One seems to be for the second version of the Nook, named Nook2.
  2. The other seems to be for a Nook aimed at children, called Nook Kids. The description reads –  

    “portable electronic apparatus for displaying, receiving, reading and storing downloadable electronic publications, namely, books, e-books, magazines, newspapers, text, images, digital web site content and digital media featuring music through wired and wireless Internet access, accessories therefor and instructional manuals, sold as a unit.”

  3. Both Nook2 and Nook Kids trademark applications were filed on June 8th. The same day that B&N applied for the Nook WiFi trademark.

There’s also talk of a software called Nook Cook, and a service called Nooksellers – which seems to be a recommendation engine.

Kindle 3 vs Nook 2 ought to be very interesting

Amazon has done really well with Kindle 3. It wouldn’t be a surprise to find out that B&N had something lined up, realized it couldn’t compete with Kindle 3, and went back to the drawing board.

If a Nook 2 arrives in early 2011, and it’s good, it could cause a lot of problems for Amazon. On one side, there’d be Nook Color eating up the casual reader market, and on the other side, there’d be an improved Nook 2 – stealing away readers interested in library books and ePub.

Depending on what features the Nook 2 has, it might even force Amazon to drop the price of the Kindle 3 and Kindle WiFi. We do need more competition in the eReader space – a Nook2 would be great for everyone.

Is a Kindle for Kids in the works? If not, how will Amazon respond to Nook Kids?

If B&N manages to introduce an unbreakable ‘Nook Kids’ eReader, for $100 to $150, it would do exceptionally well in the children’s eReader market (which we’re assuming exists). Already, with the Nook Color, B&N has shown its interested in the children’s book market. Now, with this trademark registration for ‘Nook Kids’, you have to imagine there’s a high chance we’re about to see the first eReader made for kids.

The biggest concern parents have is that they can’t hand a $189 or $139 eReader to a kid, who might drop it or throw it, and literally throw away all that money. An unbreakable eReader would solve the issue.

At the same time, most parents do want an eReader for their kids – reading makes kids smarter, it’s a far better use of free time than TV and video games, and it can also be used for school-work.

The market is huge. You have to suspect an unbreakable Nook Kids would also do very well with junior school and middle school kids. If B&N includes support for library books, and it almost certainly will, it becomes very, very compelling.

Apparently, Kindle is doing very well

The Kindle is now the best-selling product of all time on Amazon.

Yup, I don’t know what that means either.

Apparently, the latest Kindle outsold Harry Potter and the Deathly Hallows, and since everyone knows exactly how many copies of that Amazon sold, we know exactly how many Kindles Amazon has sold.

Well, actually – No one knows that Harry Potter number.

We can only make wild guesses while Jeff Bezos laughs at the amount of mileage he’s getting out of all these inane comparisons. Wonder what’s next – We sold more Kindles in the last 27 hours than there are craters on Ganymede.

Harry Potter sold over 44 million copies. What share did Amazon have?

By end of 2008, the 7th Harry Potter book was estimated to have sold 44 million copies. Let’s assume that at the end of 2010, the figure is 55 million. Next, let’s assume Amazon sold between 5% and 8% of copies sold worldwide (which is pretty generous).

That would mean Amazon sold between 2.75 million and 4.4 million copies. Amazon is saying sales of the latest Kindle have exceeded that figure – which suggests 3 to 5 million new Kindles sold.

LCDs aren’t hurting eReaders – so says Mr. Bezos

Mr. Bezos also took the time to mention that customers ‘report’ that they use their LCD tablets for games, movies, and web browsing, and their Kindles for reading.

Apparently,

  1. Kindle eliminates battery anxiety. Methinks people who have battery anxiety need something other than a Kindle.
  2. Kindle doesn’t interfere with sleep patterns at bedtime. What other kind of sleep patterns are there?
  3. The $139 price point is low enough that people don’t have to choose.

There are more gems in the Press Release –

On Christmas Day, more people turned on new Kindles for the first time … and purchased more Kindle books than on any other day in history.

Have we started measuring things like how many people turn on devices on a particular day now?

At this point you can be 100% certain the people at Amazon are having a huge laugh about their Press Releases. It’s like a vagueness contest. The first person says – Let’s talk about selling more than Harry Potter. The second says – You know what’ll really wind people up. Talking about how many people turned on a Kindle.

You also have to commend the use of ‘more Kindle Books than on any other day in history’. This is a product that’s 3 years old. ‘History’ is a bit of a stretch isn’t it.

The Too Much Information Department

Here’s the first thing that seems supremely out of place in a Press Release –

One of Amazon’s most remote shipments contained the “Tinker Bell and the Great Fairy Rescue,” “Toy Story” DVDs, “Chicken Soup for the Dog Lover’s Soul,” NHL 11, Halo Reach and Call of Duty: Black Ops and was delivered to the hamlet of Grise Fiord, north of the Arctic Circle in Canada.

Here we were, thinking that people who live in the Arctic Circle lead exciting lives with Predators and Penguin Races and Polar Bear Wrestling. Thanks for killing that fantasy Amazon.

There’s also stuff like this –

Amazon customers purchased more Philips Norelco shavers this holiday season than the average beard hairs on a man’s face.

You know what – That doesn’t sound very impressive. It’s not like we men have millions of ‘beard hairs’ on our faces. Perhaps BigFoot’s beard would make for a more apt comparison.

Coming back to the Kindle

There’s interesting news everywhere –

  1. Earlier this morning we discussed the rumor that Sony might have sold 2 million Sony Readers in 2010.
  2. Nook sales must have been good because Nook owners are complaining B&N’s servers haven’t worked properly for the last three days.
  3. Kobo sold 50 times more books this Christmas weekend, than it did during last year’s Christmas weekend. It also saw a million people register at its website over the course of last weekend, and people from 130 countries bought Kobo books.

A 50 times increase in books sold seems almost unrealistic. Was Kobo even open last year?

Kobo is beginning to learn from Amazon – It peppers in enough vague statements to be confusing – ‘hundreds of thousands’ of devices have been registered to Kobo eBook Store everyday since Christmas Eve.

What does ‘register’ mean? Wasn’t Christmas Eve just 3 days ago?

The silver lining to this ‘best-selling item ever on Amazon’ Press Release is that it introduces the possibility Amazon stops beating the ‘best-selling item’ horse to death. Surely, there couldn’t be anything else left. It’s #1 reviewed, #1 gifted, #1 most wished ever, #1 in vagueness, #1 best-selling, #1 best-selling of all time.

Is there something else left, or can we finally get some respite?

Kindle is the best-selling of all best-selling. It is so best-selling, it’s sold by thought – People just think they should get a Kindle, and it materializes.