Mark Lennihan/Associated Press
Amazon’s Kindle Fire.
Now that the holiday season is history, it is clear that the Kindle Fire did substantially better than many forecasts.
Anthony DiClemente, an analyst at Barclays, was somewhat of a Kindle Fire skeptic in September, estimating that the tablet would sell about two million copies during the 2011 holiday season. He later revised that up to four million. Now he has thrown in the towel completely, pushing his estimate of sales up to 5.5 million.
Other analysts see even higher numbers. Heather Bellini at Goldman Sachs has been calculating that Fire sales for the quarter would be six million. In a report last month, she said Amazon had initially planned to build three million to four million devices. Despite the mixed reviews from professional and amateur critics, the retailer had to increase production immediately by millions.
All of this success has a hidden cost: Sales growth of the Kindle e-reader devices, which are cheaper than the Fire but have more limited functions, is likely to diminish. In the first nine months of 2011, when the Fire was only a rumor, Amazon shipped an estimated 10.6 million e-readers, more than triple the number it shipped during the comparable months of 2010.
But now you can pay just a little more to be able to watch video and play games as well as read text. With the Fire soaring, Goldman Sachs is dropping its global e-reader shipment forecast for 2012 to 34 million units from 42 million. And since the Kindles are the dominant player in the e-reader market, their estimates are being cut back as well, to 25 million from 35 million. However, the investment company is simultaneously predicting that Fire sales for the year will come in near the top of its estimate of 20.5 million.
Amazon never publishes the actual sales numbers of any device, so the speculation and revisions will continue. Some clues should be apparent, however, when the company releases its quarterly financial report at the end of the month.