Amazon.com touts more e-book sales than paperbacks

Third-gen Kindle sold millions in fourth quarter, CEO Bezos says

Amazon.com said it is selling more Kindle e-books than paperback books.

Amazon.com CEO Jeff Bezos said in a fourth-quarter earnings statement Thursday that the e-book-selling milestone "has come even sooner than we expected."

The company said that in all of 2010, it sold 15% more Kindle e-books than paperbacks. In July, Amazon.com reported that it had sold more Kindle e-books than hardcover books. For all of 2010, it sold three times as many Kindle e-books as hardcovers. Free Kindle books are excluded from those figures.

Bezos also revealed that Amazon sold "millions" of third-generation Kindle e-reader devices, which have the paper-like E Ink Pearl display, making it the best-selling product in Amazon's history.

The third-generation Kindle, with a 6-in. screen and Wi-Fi capability, sells for $139.

The Kindle accounts for about half of all e-reader sales, according to analysts at Forrester Research and Yankee Group. Gartner has forecast sales of 11 million e-reader devices globally in 2011, up from 6.6 million in 2010.

Allen Weiner, an analyst at Gartner, said e-reader prices have dropped, helping to spur e-book sales. Another factor in Amazon's increased e-book sales is a greater public understanding of the devices and how they function, he said.

Weiner estimated that e-books now account for less than 10% of all book sales in North America.

The biggest question is still how well e-readers, which are mostly black and white, will compete against media tablets, such as the Apple iPad and the Samsung Galaxy Tab, which have more functionality than e-readers but cost much more. The iPad starts at $499.

"E-book readers like Kindle are really going to have to go well below $99" to compete with forthcoming tablets running Android and other operating systems, Weiner said.

The second-generation iPad is expected to have an even clearer display technology, and Google is just getting started with its eBook and eBookstore concept, announced in December. Google is expected to tie in its eBookstore concept with new tablets running on the Android 3.0 Honeycomb operating system, which is maximized for tablets such as the Motorola Xoom. Google's moves will apply more pressure on Amazon and on Barnes & Noble, which sells the color Nook e-reader, Weiner said.

"Amazon needs to do everything it can to reaffirm its relationship with book publishers," Weiner said. "By saying it has sold more e-books than paperbacks, Amazon is telling publishers that there a lot of e-reader devices out there, and there may be a lot of noise about iPad and what Barnes and Noble is doing, but we're the company to beat and we own this space."

Weiner said Amazon is "seemingly a huge power in publishing, but last year a number of companies started nipping at its heels, including Apple." There isn't a lot of profit in selling paperbacks, Weiner said. By noting that it sells more e-books than paperbacks, Weiner said, Amazon seems to be telling publishers and investors: "We still own this space, and not Google or Apple."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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