Welcome to The CITE -- a blog on Course materials, Innovation, and Technology in Education, created by Mark Nelson and now part of the Publications Department of the National Association of College Stores. CITE is a pun with multiple meanings - referring to cite as in citation, something people reference; site as in location, website, or place people go to; and sight as in foresight or looking ahead to what is coming. Comments, discussion, feedback and ideas are welcome.

Tuesday, June 10, 2008

Sales of e-book readers near 1 million???

Like the environmental piece last week, I read an interesting article this week where a writer (Evan Schnittman) went out and did some old-fashioned leg work. Here is a snapshot of some of his points of evidence and/or conclusions (quoted content is in green).

Physical E-readers to top 1 Million in 2008:
  • Using data from DIGITIMES, a daily news service covering the Taiwanese IT market, in a story entitled PVI EDP shipments to grow sharply in 2008, and a simple formula, the author estimated that "the annual sales of the Sony Reader are at nearly 350,000 units. Using the same formula, Amazon is ordering an average of 42,000 units per month, which will add up to over 500,000 units sold this year." The estimate is made based on data from the article indicating that 60% of the EPD’s go to Amazon and 40% go to Sony.

  • With production ramping up to 120,000 units a month these numbers will look much better - to the tune of a combined 1.4 million units over 12 months! Even with the Kindle out of stock for a big chunk of the first and second quarter, combined sales of these two e-ink devices in 2008 will most likely top 1 million. If a million devices are out on the street looking to feed, and we know they primarily eat one kind of food, ebooks, then what must this mean for the ebook sales?

E-book sales on the rise as well:

  • Jeff Bezos said last week that ebook sales in the Kindle store had hit 6% of book unit sales. What this means is that of the 125,000 titles available in the Kindle store, the sales of ebooks represented 6% of the sales of those same 125,000 titles in print formats. Another interesting thing that Bezos said was that Kindle buyers purchase at a rate of 2.5 times more than print book buyers… food for thought when thinking through your ebook strategy.

  • Assuming that anyone who buys an e-ink ebook reader is doing so to read ebooks, lets assume that 10 ebooks a year is a reasonable purchase estimate. Using this logic, we should see 10 million ebooks purchased for these two devices in 2008. (Author does provides some background to make this estimate seem realistic and not just a SWAG).

  • Using other data and estimates, the author goes on estimate $120,000,000 in ebook sales for the Kindle and the Reader in 2008, double all ebook sales in 2007.

Future e-book growth:

  • Success in technology, like everything else, leads to more success. It’s not uncommon to see five-fold growth the year following a successful technology product launch. Think iPod, think Wii, think Blackberry. Whole micro-economies emerge around products that range from accelerated content creation, and all sorts of aftermarket products and services. Versions 2.0 and beyond create better and better devices. The better the devices, the more accessories, the more content there is, and soon a whole world of business opportunity is rolling downhill picking up speed. With this in mind, I can easily imagine the success of Kindle and Reader dramatically expanding next year and growing by a factor of five. If that happens, then the formula above leads to a completely new ebook economy. Five million devices would mean ebook sales of $1,200,000,000, which, by my estimation, is 1.3% of the current global book market of $90,000,000,000.
Still think e-books do not matter? A final quote from the article was perhaps my favorite, and one I will use again. Schnittman comments:

This reminds me of a comment I heard from a music industry executive at a
conference a couple of years ago. “One day there was the iPod and iTunes. The
next day 20% of our business was digital. The day after that more than 50% of
our revenues came from digital music. Yeah, we believe in digital music now.”

This year a number of stores saw digital sales hit up to 20% in some courses. Yes, that is not universally true for sure, but what will we see tomorrow? Please go ahead and read the full article. There is more data and the logic can be followed, and some of the follow-up postings are also interesting.

1 comment:

Todd said...

Quite interesting