That’s according to updated estimates from Doug Anmuth, analyst at Barclays Capital, in light of Amazon’s Q4 results and recent accounting change. Anmuth says he estimates 3.1 million Kindles will be sold this year (62 percent growth Y/Y) and Kindle-related revenue will be $1.6 billion, or 5 percent of AMZN’s total revenue. Some other points from him:
— Even if Kindle device market share losses are 10 to 15 points greater than we currently anticipate, the negative impact on Amazon’s overall revenue over the next three years would be less than 2%.
— Increased competition from the iPad, but Kindle is significantly cheaper & will continue to appeal to somewhat of a different market given the e-Ink screen, smaller form factor, better battery life, & lower weight.
— While the recent pricing dispute with Macmillan could signal a broader shift toward an agency model of eBook distribution, we believe higher margins will partially help offset the lower volume resulting from higher eBook prices.