Holidays Are Hot for Kindle, but 2010 Could Bring Big Chill

Amazon’s e-reader device, the Kindle, experienced its best sales month ever in November, according to the company, which made the announcement even before Cyber Monday purchases were tallied.

Amazon did not release any actual numbers to back up its claim, however, and it did not return a call from the E-Commerce Times by press time.

It is unclear whether Amazon was taking into account Kindle sales made on Thanksgiving Day and Black Friday, when traffic to the site was at its heaviest. Amazon received the most number of visitors — 13.55 percent out of 500 major online retailers — on those two days, according to Hitwise.

Despite the vagueness of Amazon’s statement, there is little mistaking the groundswell of consumer interest in the e-reader product category, and Amazon’s Kindle is the clear market leader. Its established hold, along with recent stumbles by its competitors, means the retailer will remain in this position for at least a little while longer.

Slow to Market

Delays in shipments could damage sales of Barnes & Noble’s Nook and possibly Sony’s newest Reader, the US$399 Daily Edition. The Nook was originally set to be available for purchase on Nov. 30; the company has now delayed distribution for one week, eating away valuable holiday shopping time.

Barnes & Noble was unable to return a call from the E-Commerce Times in time for publication.

Sony’s Reader Daily Edition may not be available for shoppers seeking a tangible gift to put under the Christmas tree. The company is taking pre-orders for the 3G wireless device but, according to its Web site, shipping could be as late as Jan. 8. The soonest consumers could receive the device would be Dec. 18. Sony also was unable to return a call from the E-Commerce Times by press time.

Growing Demand

In the short term — that is, for this holiday shopping season — Amazon will clearly benefit from its competitors’ delays, In-Stat analyst Stephanie Ethier told the E-Commerce Times. Amazon already has such a head start that even if the Nook and the Daily Edition — the first Sony product viewed as serious Kindle competition — had been able to reach the market on time, they would have not have been able to make significant headway.

However, the market is still in its early days, added Ethier. New buyers will become interested as Sony and Barnes & Noble ramp up their distribution and refine their products even more.

A list of most sought-after products for this holiday season from In-Stat’s technology adoption panel does not include e-readers among the top five, she noted. Consumers are more interested in HDTVs, notebook PCs, digital cameras, Blu-ray players and desktop PCs.

E-readers are on the list of desired CE products, she noted, and are likely to move up next year, especially after new entrants come to market.

Competing Products

“Amazon is the leader right now, with more than 80 percent of the market, but I would say Sony is stacking up heavily as No. 2 with its broader lineup and wider range of price points,” Ethier said. The Daily Edition, which Ethier has seen, holds particular promise with its wireless connectivity.

That, married with Sony’s access to free library content, will make it a formidable competitor to Amazon, she said. Also, Sony has cachet in the consumer electronics market.

Barnes & Noble has cachet as well; its advantage is that consumers can test the device for themselves in the stores, James Brehm, senior consultant at Frost & Sullivan, told the E-Commerce Times. “The Nook stands a chance of taking considerable market share away from Amazon in the near term and balancing the market out a little bit, because it is being marketed in its stores as well as online.”

By the Numbers

When the year’s figures are tallied up, one-third of e-reader sales will have occurred in November and December alone, Brehm estimated.

A good portion of those sales will be from people waiting to see what Sony and B&N have to offer, he predicted.

A significant jump in sales is likely, according to In-Stat, but it might not occur in Q4 2009.

The e-reader market will jump from an expected $800 million in device sales this year to perhaps as much as $2 billion by the end of 2010, according to Ethier.