Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Amazon (s amzn) did some blockbuster Black Friday business with its Kindle devices, recording a 4x increase over the previous year, the company crowed today. Now, it wouldn’t be an Amazon press release without side-stepping real unit numbers. But the sales boost shows that Amazon is still accelerating its Kindle business and the Kindle Fire is likely contributing to the sales growth.
Here’s a look at four reasons why Amazon’s Kindle business saw such big growth on Black Friday:
- Prices are down from a year ago. With Kindles now starting at $79 and going up to $99 for a Kindle Touch, we’re below the $99 price point for impulse purchases. That’s also well below last year’s starting price of $139 and the original $399 Kindle in 2007. There’s also a $149 Kindle Touch with 3G. Of course, you have to deal with Amazon’s “special offers” advertisements if you want those cheap prices on the lower end Kindles, but these days, in this economy, it seems like Amazon could get a lot of takers who are willing to trade some advertising impressions for a cheaper entry price.
- More options across the line. Now, with a Kindle Fire topping out the line, Amazon can cover the whole spectrum, providing a device for everyone. That wasn’t the case last year when tablet shoppers had to look elsewhere. But Amazon can say it’s got the e-reader and tablet market covered now with premium quality e-readers that have expanded capabilities, new touch capabilities and slimmer designs to boot.
- Amazon’s broad ecosystem. Amazon is touting that it has 18 million pieces of content from movies, TV shows and songs to books, magazines, apps and games. With the Kindle Fire, Amazon has a way to sell all of those directly to users, in addition to tangible goods. In many ways, it turns the Kindle Fire into a store and also more of a service than an actual product. And the company has found a way to add value to its already popular Amazon Prime product: Subscribers gain more videos available at no charge for their Kindle Fire.
- There’s still a market for e-readers. Now, it’s unclear what the break down is between the Kindle Fire and Amazon’s e-readers. But even before this past weekend, Amazon said it had already sold millions of its new Kindle family. It shows that there’s still a growing need for more dedicated readers, at least until better display technology comes around that mixes e-ink with back-lit displays. I have a Kindle Fire and it’s good for reading, but it still shows a fair amount of glare, especially outside.
The good times should keep going for Amazon, which has the most recognizable name in e-readers and is now building a very robust tablet business on top of it. Citibank(s C) recently upped its Kindle sales projections from 26 million units to 30 million units in 2012. Citi estimates that e-paper display shipments could exceed 30 million units in 2011 with Kindles accounting for approximately 2/3 of those shipments. And all these sales of cheap devices can spur on purchases of digital goods, which is where Amazon will make its money.