Sure, we’re skeptical about Amazon's Kindle but you can’t judge a book by its cover.
An analyst at Citi argues the $350 machine e-book reader is indeed going to be Amazon's iPod. He now thinks Amazon will sell 378,000 units this year, double his initial guess.
And he thinks instead of being a $750 million business, the Kindle will in 3 years be a $1.1 billion business and 4% of all Amazon sales.
| Popular Electronics Unit Sales In USA in Q4 (in '000s) | |||
| Q4:06 | Q4:07 | Q4:08E | |
| Apple iPod family (nano, touch, shuffle) | 9,130 | 8,240 | 8,050 |
| Microsoft Xbox 360 | 1,864 | 2,392 | 2,500+ |
| Nintendo Wii | 1,084 | 2,852 | 3,000+ |
| Sony PS3 | 688 | 1,381 | 1,500+ |
| Kindle** | - | 20+ | 150+ |
| Source NPD; ** Citi Investment Research | |||
Unverified sources (because Amazon ain’t talking) say 240K have been sold and the current monthly sales are at 40,000 a month. Amazon has to sell 150,000 units in Q4 -- something that's only going to happen if the Kindle becomes a must-have holiday gift.
Kindle users pay up to $9.99 for a new title. That's much less than a hardcover price. College kids can receive text books almost on demand. So why isn’t Amazon worried that Kindle might be the black hole of books swallowing the business?
Amazon says "Kindle's affect is additive to physical book units. Post the purchase of a Kindle, owners buy 1.6 times as many book titles and the same amount of physical books."
There’s a new version coming that is supposed to be significantly thinner with a better screen, more style and better user interface. Some claim Kindle will jump from Generation One to Generation Four or Five.
If you don’t believe the Citi analyst (OK, banks have been wrong about a lot of things lately), then trust the famous Silicon Valley VC John Doerr of Kleiner Perkins. He told Wall Street Journal, Kindle will be a $1 billion business before too long. “I think they did a brilliant job in version 1.0 product, in meeting an unobvious need…I think of it as a seamless and effortless way to get visual content. And honestly, they’ve just begun. They’ll leverage all the same cost curves [that benefit all hardware products]. Imagine what a Kindle will be like five years from now,” with models in different colors and sizes
And Kindle has competitors. See the Display that Could Spell the End of Paper…
The category that includes ultra-mobile PCs (UMPCs), “netbooks,” and mobile internet devices (MIDs)—UMD Shipments will grow from 10 million units this year to more than 200 million in 2013. 
