Tuesday, October 4, 2011

Kindle Fire said to be "on fire" at 2000 per hr pre-ordered the first 5 days

Per geek.com's Matthew Humphries: "Kindle Fire pre-orders exceeding 2,000 per hour"

The article explains that the figure is extrapolated from "Amazon’s Availability Lookup and SKU Aggregator (Alaska) system, used internally for tracking stock" -- "in the first 5 days pre-orders were available, 250,000 Kindle Fires were snapped up."

  They're referencing an original story at Cult of Android, which loads on my Firefox only if I grant all kinds of script permissions, while it loads automatically on Internet Explorer.  So, with that caveat for those of you who use NoScript and other browser-script imonitors,  the rest of this is from the Cult of Android story written by John Brownlee yesterday afternoon.

I started this blog article early this morning and then had to leave, not getting back until 5pm so this is "old news" as I type it but I thought I should finish the report of the headlined news anyway, so here it is.

Amazon's internal inventory management system
Brownlee says that a "verified source within [Amazon] has provided exclusive screenshots of Amazon's internal inventory management system Alaska (Availability Lookup and SKU AGgregator)" and you can see the scaled down and larger version at the linked story.

  For the first five days, the pre-orders are said to be showing 50,000 orders per day, and their projections -- which probably should not be based, in my view, on the first 5 days, because heaviest pre-orders would be in the first days of the announcement --  are that "if this level of consumer demand...continues, Amazon will have 2.5 million pre-orders for Kindle Fire before it even officially goes on sale on november 15th.

Biggest tablet launch in history?
  Brownlee adds that if the trend contnues, this would be the "biggest tablet launch in history" for first month sales, and that includes, he says, the launch of the far more expensive iPad, which has, since its launch only 1.5 years ago, established an amazing library of curated applications that currently dwarfs the Google Android Marketplace's more chaotic smaller set of Android apps.  The 7" Kindle Fire would use the currently even smaller Amazon Apps Store, but obviously Amazon and its developer parties are gearing up for quite an expansion there by mid November.

Was it an unapproved leak?
The gist of the article is that someone at Amazon leaked the pre-order numbers but that Jeff Bezos would be "annoyed."
  Since the numbers alone can spark more sales, because people tend to want to go with 'winners' when they're investing money, it's not totally convincing to me that this was a rogue leak, but who knows.

Numbers for the new low-cost EInk readers
THEN, Cult of Android shows what they call "The Amazon internal pre-order numbers for the Kindle Touch and Kindle Touch 3G eInk readers, respectively" and the numbers indicate, Brownlee says, that the tablet is vastly outselling the two lower-cost e-Ink reader models.

  That would be expected, since the "rest of the world" that doesn't want a either a dedicated e-Ink reader or another eInk model after 4 years of availability and past purchases) and which has been waiting for a low-cost but promising tablet (for media needs) from a company they expect will deliver both a good tablet and also content that makes it worth buying that tablet, would heavily lean toward the new, color-filled option with video and audio features that are never a focus of the lower-cost dedicated readers.

 As we've seen, many have bought the iPad AND either a Kindle or a Nook, the latter for books only. 

The WiFi-only Kindle Touch, at $99 with Special Offers (ads subsidizing part of the cost) is being outsold, Brownlee writes, "at the rate of ten to one, racking up only 20,000 pre-orders to date, while the Kindle Touch with 3G and WiFi and with Special Offers is shown with only a few more than 12,000 pre-orders so far.

  They don't show a table for the NON-Special Offers e-Ink models, but Amazon has always said that the Special-Order models outsell the regular ones.

Verified numbers?
  Brownlee closes with the statement that these are "verified order numbers" (and that would only be if he knows and trusts the person at Amazon said to have given him these numbers) and that "a preorder is not the same as a sale," pointing out that consumers could mass-cancel orders (not likely) or that demand could level off (a more realistic possibility but also not a given either as the word spreads, which I've been experiencing).

Reconsidering the 7" tablet market
  Steve Jobs has dismissed the 7" tablet market as negligible, saying that people want a 10" at the minimum (apparently that's what the research of Apple-leaning consumers told him) but the rest of the consumer world may be similar to another group whose wants he had dismissed in Jan. 2008, when he also told The New York Times's John Markoff and David Pogue that the new Kindle device wouldn't do that well, explaining, "The whole conception is flawed at the top because "people don’t read anymore."

  As we've seen, different devices and form factors coexist because people can be more varied than some market research might indicate depending on the structure of the questioning or interpretation of results.

A Starter Tablet?  Or is ultra-portability, lightness, the draw itself?
  It may well turn out that people decide that, despite the attractiveness of ultra-portability and a lower price that can encourage gifting of a 7" tablet within families, they'd rather have a 10" tablet.
Or, not.

  Amazon and others are certainly "ON that," and some columnists point out that most who are drawn to the 10" form factor and the beauty of an iPad have, for the most part, already bought one and will again when a new one is released, but there are those who will look at other products too, and -- as been said over and over again lately -- Amazon's media and network ecosystem is a strong factor in this market.  The 7" KTab could function as a starter for those who want to look at whether or not they want to invest in a higher cost tablet, already having netbooks that can do more than a tablet while still being lightweight and less expensive than a tablet for sitting and consuming media.

  The upshot of Brownlee's article is that Apple, who would not be particularly threatened by this turn of events, could just decide that maybe it's time they ought to just offer a 7" iPad !

Interesting Comments
In the Comments section to Cult of Android's story, one commenter expressed doubts about the story itself, citing Photoshop as a good 'source' for the figures, and Brownleee responded,
  "We verified our source, so no, these aren't Photoshops."

More entertainingly, maybe, another commenter said,
  "The rooted Nook is the bomb. A rooted kindle is a nuclear weapon"

Possible Cost to Amazon of each Tablet
Within the two articles I cited, Cult of Android being the primary one, there are related articles indicating the innards of the Fire may cost about $150 based on what's known about RIM's Playbook, minus the features (camera, amount of memory, SD slot) that would allow them to price a basic tablet at the lower cost -- with the idea that the Cloud and Amazon Silk browser's network computing power, will compensate for the lower amount of local storage given, via virtually unlimited storage on the Cloud.
  Other estimates of the cost of the Kindle Fire have not included looking at the inside of the tablet or even the Playbook, which was a sort of hardware template for Amazon's new offering.

Kindle Touch 3G   Kindle Touch WiFi   Kindle Basic   (UK: KBasic)   Kindle Fire
Kindle Keybd 3G   (UK: Kindle Keybd 3G)   K3 Special Offers   K3-3G Special Offers   DX

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  1. I think that one thing that will affect the sales of the e-ink kindles is that they are just not enough of an upgrade from the K3. When the K3 came out, I saw a lot of people who had the K2 who were planning on upgrading (myself included). With the new e-ink kindles, I'm not seeing as many people (from those I talk to) who have K3s and want to upgrade. I'm honestly not convinced that it is an upgrade (especially if you have a 3G K3). I think the lower price is great, and may convince new people to jump on, but I don't think they're going to have as many people purchasing upgrades.

    That said, I think that may be why they aren't discontinuing the K3, just re-naming it. Many people (myself included) prefer the hardware keyboard. In addition, cutting the 3G browsing is cutting out a major feature that I use regularly.

  2. What everyone is forgetting is that Amazon has millions of Prime members. And this tablet has been just about custom-made for them. So it's no surprise it's got huge sales. I'd guess the overlap between Prime and Fire buyers is near 100%. If Prime members also got free eBooks -- as they do free video -- those eInk Kindle numbers would be 10x the sales too.

  3. In one of the source articles evaluating the KF sales counts, it was pointed out that while the KF's counts (50,000 per day) were good, the iPad2 in the same period of its initial launch was racking up sales of 80,000 per day. That seems reasonable to me. We shouldn't get carried away with hype like "best ever" -- it's good, darn good, but, again, it's not the putative "iPad killer".

    There are two KF cost estimates making the rounds $150, which you mention here, and $210 from iSuppli. At this point with no devices in anyone's hands, these estimates are nonsense.

    In the past I have found iSuppli estimates to be consistently high -- primarily because they use catalogs, or attempt to "guess" volume purchasing deals for parts costings. Also costs tend to ramp down over the life of a production run.

  4. Ed,
    I don't think "we" are getting carried away with the "best ever" -- I quote articles that say that and am just reporting it.

    However, there's little question that this device with the Amazon 'ecosystem' behind it has stirred up more enthusiasm by buyers than almost anyone had anticipated.

    I don't believe in any other-device "killer" and I think that kind of thinking is left over from high school, with its either/or and purely-competitive focus and very little discussion of the differences and target audiences.

    Of course estimates are nonsense. What else would they be?

    So, are we to have BLANK pages for stories unless we write only what is 100% certain?

    People take clues and they all have different takes, some of us report them, and the rest can try to figure out what seems most reasonable. Or they can find better ways to spend the time maybe.

    It's all a game, and a bit of the old Sound and Fury with some. iSuppli has done decent cost estimates if they open up the ACTUAL device and look at costs that are current to large companies at the time.

    Trouble is, they don't factor in costs of: assembly, transportation, storage, marketing, technical support. Especially with all that Amazon spends on good customer support.

    As most say, Amazon is looking at total cost vs total benefits of a tablet as a tool FOR revenue.


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