New Kindle a Billion-Dollar Baby?

Amazon Kindle
Source: Amazon

You know that saying about how one can’t be too thin or too rich?

Amazon would agree.

The e-commerce giant is predicted to rake in $1.2 billion in 2010 from sales related to its Kindle e-reader, according to a new research report, that also states the etailer sold 500,000 units in 2008.

The news comes as Amazon reportedly is gearing up to debut the second generation of its popular e-reader device for reading digital content at a New York event, Monday, February 9.

Citigroup analyst Mark Mahaney said he believes the New York event is a new Kindle launch and describes the device as “The iPod of the Book World,” comparing it to booming sales success of Apple’s portable music player.

The 500,000 Kindle sales figure is 32 percent higher than the number of iPods sold in its first year, noted Mahaney.

Mahaney also expects Kindle2 to be longer, thinner and include a more user-friendly keypad. Whether it will be priced the same as the current model ($359 list), isn’t known.

“We don’t expect the device to have touch-screen capability, nor do we expect the device to have a color screen. We also expect the device to incorporate faster page-turning functionality,” he wrote. Kindle critics have complained that its button page-turning design is clumsy to use.

Amazon Kindle spokesperson Andrew Herdener told that it does not comment on third-party speculation and is not releasing Kindle sales or revenue figures or design plans.

Citigroup’s revenue forecast of $1.2 billion would increase Amazon’s annual revenues by 4 percent, according to Mahaney.

His estimates are based on two big ‘ifs’ however: If the Kindle continues to sell as fast as the iPod and if users buy at least one book a month from Amazon’s e-book storefront.

One Kindle fan believes both those scenarios will bear out.

The final chapter for books?

“They will never replace paper or books, but I view them as being in the same place MP3s were at one point. Neat, handy and useful,” said Ken Levy, an acknowledged techie who has used Sony’s e-readers since its first full page e-reading device, the PRS-500, debuted in 2006 and also the Kindle.

Levy likes the Kindle’s wireless connectivity for easy book downloading, and Amazon’s extensive digital book list. But Levy, president and founder of MashupX, a consulting firm for community building around products and services, is not as thrilled with Amazon’s clumsy document conversion process or its slow Web viewing capabilities.

The Sony devices, he said, provide faster access when it comes to reading business documents due to a memory slot that provides quick document transfer. Sony’s devices also have a nicer overall design than the box-like Kindle, he said.

But design and innovation are just beginning in the nascent e-reader technology field, according to Plastic Logic, a new market player that plans to launch its own e-reader next year.

Joe Eschbach, VP of marketing, said his company’s patents on using plastic components instead of silicon in semiconductor elements, and bigger display screens, will propel e-reader adoption fast forward in the next few years.

Plastic Logic’s Reader has been described as “Kindle meets MacBook Air” given its 8 1/2 by 11 paper notepad size and lack of heft — it weighs a third of the weight of the MacBook Air.

“Think back to where digital music was five years ago and where it is now. That’s where e-readers are,” Eschbach told

In Levy’s view, e-reader device growth will be tied to improved design and cheaper cost.

“I know a lot of people who have been waiting on buying a Kindle because they want a newer version and they’re hoping it will be cheaper,” said Levy.

“It’s all about the price point,” he said.

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