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Citigroup said on Monday that Amazon.com’s (NASDAQ: AMZN) Kindle electronic book reader appears to be selling much better than expected and could double a previous estimate for units sold this year, sending shares in the online retailer up 9 percent.
With few cool new gadgets expected on the market, the Kindle could be one of the top electronics gifts of the upcoming holiday season, along with Apple’s (NASDAQ: AAPL) newest iPhone, Citigroup (NYSE: C) said.
“Turns out the Kindle is becoming the iPod of the book world,” Citigroup analyst Mark Mahaney wrote in a note to clients. He kept a “buy” rating on the share.
Mahaney estimates Amazon will sell up to 380,000 Kindles in 2008, up from a previous forecast of 190,000, noting that adoption rate would be similar to the first year of sales for Apple’s media-playing iPod.
He sees Amazon selling up to 150,000 Kindles in the fourth quarter alone.
Mahaney also expects Kindle and related revenue of more than $1 billion by 2010, compared with a previous view of $400 million to $750 million.
Amazon introduced the Kindle in November.
According to Amazon, the company has not suffered any drop-off in traditional book purchases due to the Kindle’s popularity. The device’s wireless connectivity is the device’s big key innovative feature, Forrester analyst James McQuivey has said.
At the company’s annual shareholder meeting in May, CEO Jeff Bezos expressed a commitment to the Kindle’s long-term development.
“One of our competitive advantages at Amazon is that we are willing to plant seeds — if we think the seed is important — and nurture it for a long time,” Bezos said.
“Everything worthwhile that we’ve done, we’ve had to invest in for some number of years, so I doubt this will be any different,” he added.