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Kindle e-book: beginning to catch fire?

By Gregoy M. Lamb / August 12, 2008



Amazon.com received a rave for its Kindle e-book this week. An industry analyst at Citigroup doubled his forecast for 2008 sales of the paperback-sized device from 190,000 to 380,000 units.

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If those estimates hold up, it would mean that sales of the Kindle, which can download and display some 150,000 books as well as other reading material (such as newspapers), would track well against the first-year sales of Apple’s iPod.

The analyst, Mark Mahaney, also predicted that the device, introduced last November, could become one of the hottest gifts of the holiday season this year, largely because no other game-changing new gizmos are likely to be introduced this fall. The biggest competitor in December would likely be the new iPhone.

While Amazon hasn’t released sales figures, the website TechCrunch says a source who has seen the numbers reports 240,000 Kindles have been shipped since last November. They currently sell for $359.

That’s a little high for an impulse buy, especially since seeing one before you pull out your plastic isn’t easy. The Kindle is only available online from Amazon, and the chances of knowing someone who has one already may not be that good.

An informal survey by a San Francisco-based columnist for MarketWatch found that “in Silicon Valley – the capital of early-technology adopters and the bleeding-edge users of all things geek – actual sightings of the device are quite rare.” She adds:

One Silicon Valley software developer who asked not to be named said he viewed the Kindle as a "blip," adding, "It's on no one's radar."

Still, says Therese Poletti, a senior columnist, “the Kindle is possibly the best electronic book reader that has been developed to date and many users are impressed with its speed in downloading books.” On the downside, she notes, some owners have complained about its user interface and ergonomics, including its thick size and “the fact that it is too easy to skip the pages forward and lose your place in a book.”

An analyst from Ockman Research, writing at seekingalpha.com, an investment website, says the Kindle could become a hit with students: “[T]hey would be able to carry text books as well as additional reading materials housed in one handy device.”

But just how many gadgets is anyone likely to buy and tote around – a smart phone, an iPod, a notebook computer, and a book reader? Might the Kindle take over any other duties and become even more valuable? The Ockman analyst sizes it up this way:

The Kindle has wireless capabilities but they are confined to searching and downloading Kindle content. Amazon CEO Jeff Bezos has aspirations to bring more multi-media content to the Kindle but the current version is severely lacking. What does the Kindle have that will make the holiday shopper say, “Wow, I need a one of those”? This brings us to the final flaw of the Kindle, the price tag. Retailing for $360, the Kindle is anything but cheap, and although throughout the course of a contract the iPhone is more expensive, consumers will likely balk at the sticker shock.

The grade for Kindle after nine months looks to be an “incomplete”: Good enough for it to stick around long enough for an updated (improved?) version to appear, but for now still far short of a geek sensation.

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