Could Nook sales be within striking distance of Kindle sales?

The Kindle is alleged to have sold 8 million units in 2010. That’s a HUGE number.

It makes you wonder whether Amazon has destroyed the competition, and accounted for 80% of eReader sales in 2010, or whether the Nook and Sony Reader have done quite well too.

Let’s look at 3 scenarios, and the data points that support each. To simplify things, we’ll only consider Kindle and Nook sales.

8 million Kindle Sales, 2 million Nook Sales

This is the ‘Kindle dominating 2010′ scenario.

Here are the data points, and factors, that support this -

  1. [Rumor] ‘Insider sources’ claiming they saw Kindle sales projections of 8 million units sold in 2010.
  2. [Vagueness Overload] Amazon saying it sold ‘millions of Kindles’ in the first 73 days of Q4, 2010. Also, that sales exceeded Kindle sales in all of 2009 – which were also stated to be ‘millions of Kindles’.
  3. [Vagueness Overload Part 2] Amazon saying it sold more Kindles around the time of Kindle 3 launch, than it sold in December 2009. 
  4. Kindle was the markedly better eReader, once Kindle 3 and Kindle WiFi came out.
  5. Kindle WiFi at $139 was a steal.
  6. Kindle is available internationally. Nook isn’t available outside the US. Sony Reader is only available in some countries.
  7. Kindle was finally available in stores – Target, BestBuy and Staples. 
  8. Kindle 3 won over some of the main stream press.
  9. Amazon did a lot of advertising.
  10. Kindle 3 reviews were very good.

It seems 8 million Kindles might be a possibility. Does that mean Amazon dominated Nook thoroughly, and only 2 million Nooks were sold?

Here are some things that make it unlikely that Nook accounted for only 20% of eReader sales in 2010 -

  1. There wasn’t a very clear cut winner between Nook and Kindle 2 at the beginning of 2010. It’s not until the end of July, when Kindle 3 and Kindle WiFi came out, that Kindle became the no-doubt-about-it #1 eReader choice.
  2. Then in October end, Nook Color was announced, and it again muddied up the waters. Kindle was still the best eReader – However, there was doubt over which was the better reading device.
  3. Kindle doesn’t support ePub and library books – That causes a significant number of people to choose Nook or Sony Reader instead.
  4. Kindle doesn’t have lending and the Nook’s LendMe feature must have made a difference, until October, when Amazon announced it would be adding lending.
  5. Nook Color has done very well in the last few months. B&N’s CEO claimed he was seeing 540,000 Nook Color sales per month – which probably means Nook Color alone sold around a million units in 2010.
  6. Nook is available in more stores than Kindle, including WalMart. It was available at BestBuy earlier than the Kindle was. Plus, it’s available at all B&N stores.
  7. Kindle was not available internationally for the last two months of the year. 
  8. Kindle was often out of stock at retailers – which meant people chose Nook or iPad instead. 
  9. B&N has had Nook in stock throughout.
  10. There was a brief period, perhaps 2 to 4 weeks, where Nook WiFi was available, and Kindle WiFi hadn’t been announced.
  11. Authors have been talking about the impact Nook ebook sales are having.

Looking at this list, it seems extremely unlikely that Amazon managed to sell 8 million Kindles while B&N got stuck at 2 million Nooks. The gap couldn’t have been 6 million units.

8 million Kindle Sales, 5 million Nook Sales

Let’s assume, and it’s a big assumption, that Amazon did sell 8 million Kindles in 2010. Then we could extrapolate Nook sales by comparing the two eReaders’ relative appeal, their value for money, and their availability.

What do we know about Kindle vs Nook -

  1. Until Kindle 3 came out the two were neck to neck. After Nook Color came out, you can argue they were again close.
  2. DigiTimes claimed that Nook was doing better than Kindle in April and May of 2010.
  3. B&N’s Nook has had better retail availability throughout 2010.
  4. Amazon has been available internationally in 2010 – until the last two months, when it was sold out.
  5. Amazon has the Kindle DX. B&N doesn’t have a competitor for the DX.
  6. B&N has a ‘Reading Tablet’ (the Nook Color), while Amazon doesn’t.
  7. Nook WiFi was the cheapest eReader for a few weeks. For the rest of the year Amazon has had the cheaper eReader.
  8. Kindle is the ‘default’ eReader associated with reading.
  9. Kindle has a slightly better store.
  10. Kindle has better infrastructure and provides free Internet.
  11. B&N’s Nook supports library books and lending.
  12. B&N has its book store and book store based features.

If you look at all the factors, it’s hard to imagine a scenario in which Nook sales could have been less than 50% of Kindle sales.

Kindle 3 is clearly better than Nook – However, Nook has some strengths Kindle can’t match (library books, ePub, lending) and better retail availability. Kindle WiFi beats Nook WiFi – However, the Nook WiFi has much better availability and some clear advantages. It’s unlikely that Kindle 3 and Kindle WiFi were outselling Nook and Nook WiFi 4:1 or 3:1.

Combine that with the fact that Nook Color probably sold 1 million units, and that for the first 6 months of the year, Kindle and Nook were neck to neck.

If Amazon sold 8 million units - B&N must have sold 4 to 6 million units.

Amazon selling 8 million Kindles in 2010, and B&N selling 5 million Nooks in 2010, is pretty optimistic – However, it’s not impossible. If true, it would be great for readers, eBooks, and eReaders.

6 million Kindle Sales, 4.5 million Nook Sales  

What if we play devil’s advocate, and assume one of the following -

  1. Kindle Sales Projections of 8 million Kindles sold were for lifetime sales. Which would mean 2010 Kindle sales projections were around 5 million.
  2. Kindle Sales Projections for 2010 were 8 million, but they weren’t hit. That we ended up with around 5 million or so sales instead.
  3. The ’8 million Kindles sold’ rumor is not based on fact. Bloomberg is basing its article on kindle sales projections that two people saw at some unspecified point of time in 2010. It’s pretty sketchy – even for a rumor.

We’re saying the ’8 million Kindles sold’ rumor/projection/estimate is nonsense.

Let’s build our own rough estimates of what Kindle sales and Nook sales were like in 2010.

First 6 to 7 months (before Kindle 3 came out)

Let’s assume that true sales lay somewhere between what DigiTimes claimed (Nook outselling Kindle, 1.3 million eReaders in Q1, 2010), and what a 8 million Kindle sales figure would suggest (2 to 3 million Kindle sales in the first 6 months of 2010).

Let’s say Kindle saw US and International combined sales of around 1.25 million Kindles. Nook saw US sales of around 1 million Nooks.

Kindle 3 and Kindle WiFi golden run

For the first 3 to 4 months the Kindle 3 was out, it was the best option. Let’s assume that it captured the majority of eReader sales during that stretch.

In July through September, Kindle saw US and international combined sales of around 1.75 million Kindles. Nook was hit by the Kindle being so good, and only saw sales of 1 million Nooks.

Holiday Season

Here we’ll assume that Amazon was correct – that it did sell more Kindles in the first 73 days of the Holiday season, than it did in all of 2009. We’ll also assume that 2009 saw 2 million Kindle sales.

Add to that – Kindle wasn’t being sold outside US and UK for most of the Holiday season. Nook Color was doing very well, and iPad was again getting a lot of buzz.

It would suggest 3 million Kindle sales during the Holiday Season. Nook probably saw 1.5 million units sold, and Nook Color probably saw 1 million units sold.

Putting it all together

For Kindle we get: 1.25 + 1.75 + 3 = 6 million Kindle sales.

For Nook we get: 1 + 1 + 2.5 = 4.5 million Nook sales.

For some reason, even these seem a bit optimistic. However, ’6 million Kindles sold and 4.5 million Nooks sold’ sounds a lot more believable than ’8 million Kindles sold and 2 million Nooks sold’.

Kindle = new iPod, or ’8 million Kindle sales’ is an anchor

The rest of this post is a wild, wild guess. Based on zero facts.

There seem to be only two plausible explanations for the 8 million Kindles sold rumor – Either Kindle is the new iPod, or Amazon is using amazingly good anchoring.

If it’s the first, then there’s nothing to discuss - Amazon has won the eReader wars, eReaders are going to sell tens of millions of units a year, and the eBook wars are effectively over.

The second possibility is very interesting. The 8 million Kindles sold rumor seems like anchoring.

Could Amazon be leaking inflated sales figures to establish social proof, and anchor Kindle as the winner?

Consider what we have -

  1. Nook Color doing well, and selling half a million units a month.
  2. iPad doing very well, and having sold 7.3 million units between launch and Holiday Season. 
  3. Nook and iPad being available in a lot more stores.

Amazon needs to take back the momentum. It needs to re-establish ‘Kindle = Reading’. The best way to do that would be to leak a very impressive figure for Kindle sales which makes the Nook Color’s sales seem trivial, which shows Kindle is doing nearly as well as the iPad, and which makes it seem that Nook has lost the eReader wars.

8 million Kindles does that. It makes everyone assume that Kindle is the new iPod, and that Nook is dead and buried. It makes every potential eReader owner feel she must join the 8 million people who have chosen a Kindle.

Why doesn’t Amazon make the killer announcement?

If Amazon wants it can drive a stake through the heart of every other eReader by announcing 10 million total Kindle sales. If Amazon has sold 8 million Kindles this year, it has the opportunity to tell every potential Kindle owner – Choose our team of 10 million Kindle owners, and not that team of 1 million Nook owners.

Yet, it would rather let people ponder Kindle vs Nook and Kindle vs Nook Color. That makes no sense.

At this point everyone knows the market for eReaders is huge. They just don’t know whether it’s 5 million eReaders sold this year, or 10 million. Amazon can’t fly under the radar any more. What reason is there to hide actual Kindle sales figures?

Every single Amazon rumor seems to have amazingly good timing – the Kindle DX rumors, the Kindle WiFi rumors, this 8 million Kindles sold rumor. Amazon seems to be doing its best to either make good sales figures seem great, or to hide great sales figures from competitors. Yet, the second seems more doubtful by the day.

If Kindle sales figures really are absolutely amazing, and Amazon wants to hide them, why are there constant strategic announcements (millions of Kindles sold) and strategic leaks (8 million Kindles sold)?

If Kindle sales are so great that Amazon doesn’t want anyone to know, the most effective move would be to say nothing. The fact that Amazon isn’t choosing that option might be more revealing than all the rumors and estimates.

60,000 Nook sales so far Vs 500,000 Nook sales by March

The Kindle has faced tons of speculation – Is it really selling? How much is it selling? 

Now, it’s the Nook’s turn. Michael Arrington at TechCrunch has written an article on Nook sales which is hard to fathom.

He’s basically saying -

  1. His Asian sources have told him 60,000 Nooks will ship this year. 
  2. B&N have 500,000 Nooks set to ship in the first 3 months of 2010.

The huge gap between those two numbers makes you wonder about the validity.

Did B&N ship just 60,000 Nooks this year?

The Nook was available for pre-order around October 20th and got sold out on November 20th.

NY Times has details and the crux is -

  1. October 20th to November 20th pre-orders led to the Nook selling out.
  2. Orders after November 20th would only reach post January 4th.
  3. That means the first 1 month of pre-orders was 60,000 – if TechCrunch’s numbers are right.

That doesn’t make sense because -

  1. The Kindle had its best month of sales (up to that point) in November.  
  2. Best month means more sales than the Kindle 2 launch month or Oprah Kindle month. 
  3. Nook was getting a lot more love from the press than the Kindle.
  4. Nook was getting a ton of positive articles from the Press and the big blogs (even though no one had touched a Nook).
  5. It was the launch month – which means lots of people waiting for a viable Kindle alternative must have jumped.

The combination of Kindle having its best month ever and the Nook getting more buzz and coverage means that it’s inconceivable that just 60,000 Nooks sold in the first 30 days after launch.

Are Nook really going to sell 500,000 Nooks in Jan to Mar 2010?

Any orders after November 20th ship in 2010 so that’s when our clock starts. There are 2 time periods -

  1. November 20th to end of December. This is all the people who preordered or ordered despite mostly negative Nook reviews.
  2. January, February, March 2010. This is when B&N expect to have Nook in stores and get more sales.

The sales in the first time period must have been huge – it’s Christmas shopping season, B&N’s promise to fix speed issues calmed a lot of people, and eReaders in general did very well.

The sales in the second time period ought to be significant too – first three months of 2010 you suddenly get Nooks in store and can start utilizing your retail presence, you fix the common issues, and people see other people with Nooks and get interested.

Add up sales across both time periods and it’s quite plausible that B&N sell 500,000 total Nooks in November 20th, 2009 to end of March 2010.

More reasonable Nook sales estimates for 2009

Whether you consider -

  1. Forrester’s estimate of 1 million eReaders sold in the 2009 holiday season. OR
  2. CitiGroup’s estimate of 2 million Kindles sold in 2009.

You have to factor in the combination of the launch of the Nook and all the positive press it was getting -

  1. If 1 million eReaders were sold in 2009, then Nook must have gotten (thanks to the press and the buzz) at least 30% of that. At least half of that would be in October 20th to November 20th giving us 150,000 Nook sales.
  2. If 2 million Kindles were sold in 2009 and November and December were the two best months, then November must have seen at least 300,000 Kindles sold. Considering that Nook was getting all the attention it’s safe to asume it sold at least half as much as the Kindle. That again gives us 150,000 sales in the first month.

Number of Nooks shipped this year ought to be over 150,000 and the 400,000 estimate thrown about in Nook forums is not out of the question.

Would B&N be foolish enough to order just 60,000 Nooks?

If B&N were coming in with a new eReader they must have had some idea that the Kindle was selling well.

Would they really go into the holiday season, with their 770 stores (excluding 600+ college bookstores), expecting to sell just 845 Nooks a day?

It’s like saying B&N expected to sell -

  1. 1 Nook a day at each store.  
  2. 75 Nooks a day online.

Really?

That’s very, very hard to believe.

It’s much likelier that they planned for 200,000 or more Nooks in their first order – and that order sold out in a month.

Closing Thought – 500,000 is a good number

What does this say about eReader sales in 2010?

  • The big positive is that even the #2 (or perhaps #3) eReader company in the market is expecting to sell half a million Nooks in the first 3 months of 2010.
  • It wouldn’t be a surprise if Sony, due to their international availability and wider range of models, sells as many or more Sony Readers in the first 3 months of 2010.

That’s 1 million eReaders sold in the first quarter without even counting the Kindle.

The Kindle might very well see launches of the Kindle DX 2 (international version) and the Kindle 3 and eclipse those numbers.

Follow

Get every new post delivered to your Inbox.

Join 9,852 other followers