Amazon Kindle 2.0 Pre-Launch Buzz: Mass Vs. Niche?


imageAnalysts have written and speculated aplenty about Amazon Kindle 1.0 and the imminent launch of its 2.0 version this morning at 10 a.m. in NYC’s Morgan Library & Museum. (Our David Kaplan will be there.) Some more morning quarterbacking from Barclays Capital analyst Doug Anmuth and Sanford C. Bernstein analyst Jeffrey Lindsay, who differ on the Kindle’s potential, if not the actual numbers:

— From Barclays Capital‘s Anmuth, some bullish predictions about the Kindle’s potential in educational/academic market: “By potentially lowering the overall cost of books for students & improving accessibility, while also preserving economics for publishers & authors (our own take: that’s slightly questionable for now), we estimate the Kindle could generate ~$700M in revenue & more than $100M in gross profit in 2012 in the educational market. Combining our edu projections w/those for the traditional market Kindle opportunity, we believe the Kindle could add a total of $3.7B in revenue & $840M in gross profit in 2012 as the Kindle could then account for more than a double-digit percentage of our current revenue & gross profit projections. We estimate the Kindle could reduce annual textbook costs per student from $750 to ~$400. Our analysis suggests that more than 1 million Kindles could be present on college campuses during 2012.”

— Compare this to Sanford C. Bernstein & Co.‘s report from Jeffrey Lindsay and team, who still consider the Kindle a niche opportunity going ahead: “Although some hail the device as an ‘iPod for books,’ we are not so sure that it will be a catalyst for sales growth at Amazon (NSDQ: AMZN). Even with aggressive assumptions for pricing–$99 per device–we doubt Amazon could sell more than 5 million units next year. Instead, we expect Amazon to act conservatively and even maintain current skim pricing of $359 and sell 750,000 units in 2009. Kindle could add 3% -10% to 2012 EPS if Amazon prices conservatively (more likely) or aggressively. Even so, we think Kindle is still a niche product unlikely to impact 2010 EPS significantly.” Meaning Amazon still wants to continue pushing its bread and butter: the physical products, and Amazon won’t continue undercutting it: “Unlike *Apple* with the iPod, which cannibalized somebody else

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