Analyst: Kindle Will Generate $1.6 Billion In Revenue By 2012

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Analyst: Kindle Will Generate $1.6 Billion In Revenue By 2012

From a consumer standpoint, Amazon’s Kindle has made a quite a splash, with its rapidly expanding roster of publications and new large-screen model. But will it also be a big winner financially for Amazon? According to Collins Stewart analyst Sandeep Aggarwal, yes. Here is what he is predicting in a report this morning:

—The Kindle will earn Amazon (NSDQ: AMZN) upwards of $300 million in revenue this year and $70 million in profit, growing to $1.6 billion in revenue and at least $400 million in profit by 2012. Aggarwal argues that sales of the Kindle grow almost 80 percent a year from ‘09 to ‘12, and that subscriptions will also jump as a result. (Amazon gets 70 percent of subscription revenue). Some 30 percent of Kindle owners subscribed to a service on the e-reader last year, a number that Aggarwal will grow to 75 percent in 2012 as more products are offered and the device becomes more mainstream.

—The launch of Kindle-DX next month will likely exceed Amazon’s expectations and lead the company to increase its financial targets for the second half of 2009.

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Rory Maher May 20, 2009 10:38 AM ET

Posted In: Media & Publishing, Books, Magazines, Newspapers, Companies, Amazon.com

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YoDaveG

Agree with Tony. Apple is likely working on netbook alternative, whose multifunction capabilities will make it Kindle killer. Kindle will remain niche product for book readers.

Tony

This reads like a planted story. Someone "close to the company" want to unload some Amazon stock? There will be several Kindle killers out there. How on earth can you project out to 2012 when AAPL is expected to come into the market, already has tens (hundreds?) of millions of subscribers to their very efficient service. You think AAPL is going to take this attack on one of their core market - universities/colleges - lying down? No way! Do you think students will want to buy both a laptop and a Kindle reader? AAPL could modify their $999 Mac Book into a tablet, include Wifi, and suddenly you have a reader that plays movies and music, sends email, and doesn't require you to be a Sprint subscriber - use your schools WiFi. If Sony with the Walkman franchise AND a major studio could be upstaged by AAPL, so can Amazon. RIMM and AAPL killed PALM. I predict Kindle will be a money loser by 2010 and dead by 2011. Anybody want to buy an almost new Handspring?

FRED

Is this a joke or does this analyst have a special crystal ball ? The DX selling better than expected ? Who is going to spend $500 dollars fora black and white book reader. Another stupid attemp to manipulate the stock based on nothing concrete but wild speculation.

Rory Maher

Abhi, sources close to the company told use the Kindle will be released next month and the 30 percent number is an estimate by Collins Stewart for paid subscriptions.

abhi

could you specify the sources for these two bits of information -

1) launch of kindle dx next month.
Has amazon specified anywhere that DX launches in June?

2) 30% of Kindle owners subscribed to a service. Also, does this translate to subscribed to a paid service or are subscriptions to the free kindle daily blog and sample trials(that are free) included ?

thank you
abhi