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?


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