Analyst: Half a Million Kindles Sold in '08

Last Updated Feb 3, 2009 12:21 PM EST

For reasons that have never been entirely clear, Amazon.com has not been at all forthcoming about its Kindle e-book reader. One aspect no doubt has to do with the company's choice to employ a proprietary technology in an age when open-source products are proliferating.

But Amazon's brass must not have been able to reach a consensus about the Kindle, and whether it helps or hurts the online retailer massive book-selling business.

At present, Amazon says the device is out of stock, but it has never revealed how many of the pricey ($359) devices were sold.

Today, however thanks to some clever detective work by Citi Investment Research Analyst Mark Mahaney, we have a new estimate that Amazon sold 500,000 Kindles last year. This is substantially more (~35 percent) than many analysts, including Mahaney, had been predicting.

Mahaney noted that a regulatory filing from Sprint Nextel Corp., which is the main wireless network for Kindle downloads, stated that 210,000 of "certain wholesale devices" were activated on Sprint's network during the July-September period by "wholesale partners prior to selling the device to the end customer."

Mahaney concludes that this figure refers to the number of Kindles that were purchased during Q-3 last year. (So far, neither Sprint nor Amazon is reacting to the report.)

In Q-4, Amazon added another 45,000 book titles to the Kindle's inventory, bringing the total to 230,000. It's hardly "the long tail," yet, but it does indicate that a merket for e-books is beginning to emerge.

Industry rumors indicate Amazon will be releasing a new version of the device soon. Mahaney believes that revenue from the Kindle could rise to $1.2 billion by 2010 -- which would account for as much as four percent of Amazon's total revenue that fiscal year.

Note: This post continues what will be an ongoing series of articles about the growing e-book industry. Our most recent previous post covered Smashwords, a digital self-publishing platform.
  • David Weir

    David Weir is a veteran journalist who has worked at Rolling Stone, California, Mother Jones, Business 2.0, SunDance, the Stanford Social Innovation Review, MyWire, 7x7, and the Center for Investigative Reporting, which he cofounded in 1977. He’s also been a content executive at KQED, Wired Digital, Salon.com, and Excite@Home. David has published hundreds of articles and three books,including "Raising Hell: How the Center for Investigative Reporting Gets Its Story," and has been teaching journalism for more than 20 years at U.C. Berkeley, San Francisco State University, and Stanford.

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