According to Thomas J. Szkutak, Chief Financial Officer, “Kindle selection continues to grow. Since inception, we have more than doubled the number of books, magazines, newspapers, and blogs available to be delivered wirelessly in less than one minute. Kindle titles already account for more than 10% of unit sales for books that are available in both digital and print formats. We’ve ramped up manufacturing capacity over the past 10 months and Kindles are in stock and available for immediate shipment. Kindle sales since launch have significantly exceeded our expectations. We will not introduce the new version of the Kindle until next year at the earliest.”The preceding comes from the Seeking Alpha transcript of the call, which permits the copying of up to 400 words of a transcript. You can read the entire transcript here at Seeking Alpha.
Question from Merrill Lynch--“As books go more digital and you hopefully can capitalize on the Kindle, does that help Amazon's long-term profitability or hurt it? How do you look at that over a long-term basis?”
Answer from Jeffrey P. Bezos, Chairman and CEO (who jumped in for the first time to answer)--“Well, one thing that I think you could imagine happening over the long-term there is that the prices of books will be cheaper, so most of the books that we are offering on Kindle today are $9.99, even if they are $20 or $25 in print form. And so you can see that -- I think that probably the best way to answer your question is we would hope to sell many more units and make less money per unit but all in, have a very strong business.”
Question from Sanford C. Bernstein-- “. . . could you just give us an indication--when you make electronic sales of media, are they completely cannibalistic to your traditional media sales or are they additive? Thank you.”
Answer from Jeff Bezos--“So far what we have seen with the Kindle book units is that they are additive to physical book units. So when somebody buys a Kindle and the period after, you know sort of the post purchase period post buying a Kindle, they buy 1.6 times as many Kindle books as they bought physical books prior to buying a Kindle, and they continue to buy the same number of physical books. So that’s what we have seen so far and it’s a very -- obviously a very positive outcome. We hope that continues.”
Thursday, October 23, 2008
Third Quarter Results on the Amazon Kindle
Amazon released its third quarter ending September 30 results on Wednesday and held its usual call with analysts. I was mostly interested in what they had to say about the Kindle. Here are some excerpts from the call--