Calling the Amazon (NSDQ: AMZN) Kindle “the most compelling e-book device” on the market, Caris & Co. analyst Sandeep Aggarwal estimates in a report this week that the Kindle will generate revenues of more than $5.42 billion for Amazon in 2011 and “at least” $7.96 billion in revenue by 2012. The estimate is much higher than previous ones: In January, Barclays estimated that Kindle sales would reach just $3.3 billion in 2011.
What’s driving that growth? As of this month, there are 945,026 titles available in the Kindle store, an increase of 47,000 over April and of over 740,000 since November 2008, when the Kindle was one year old. The store also contains 600 enhanced ebooks (embedded with audio and video clips), 94 magazine titles, 167 newspapers, and 12,982 blogs. Although Amazon is notoriously tight-lipped about the number of Kindles that have been sold, the company acknowledged in January that it sold “millions” of Kindles in the fourth quarter of 2010, and that Kindle books had overtaken paperbacks as the e-tailer’s most popular format.
It’s possible that a Kindle tablet may be next. Aggarwal says Kindle users will buy increasing numbers of accessories and subscriptions along with their ebooks, and that they may eventually take advantage of their Kindles’ wireless connections to use the devices to listen to music, send email, and browse the Internet. These alternative uses of the Kindle tie into rumors that Amazon will release a tablet sometime in 2011.
In March, Forrester pointed out that 50 percent of tablet users research and buy products from their devices–making an Amazon tablet a natural fit not just for reading ebooks, but also for shopping. Earlier this month, Digitimes floated the rumor that Taiwanese notebook maker Quanta had received tablet orders from Amazon and that would begin shipping them in the second half of 2011. But others have suggested that Amazon, whose cheapest Kindle is currently the ad-supported, $114 Kindle with Special Offers, is more likely to release a Kindle under the $100 price point first–a goal that may be hastened by the fact that Kobo today announced “spring savings” on all its wireless e-readers, dropping their prices from $139 to $99.99.