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Mike Elgan's picture
Mike Elgan

The World Is My Office

More posts | Read bio

March 8, 2008 - 5:55 P.M.

Amazon: What are you hiding?

20 comments

SANTA BARBARA, CALIF. -- Amazon shipped its Kindle e-Book reader way back in November of last year. Since then, the company has tried to paint a picture of runaway success by suggesting that the incredible popularity of the device prevents the company from keeping up with orders. Is the Amazon Kindle really a secret failure?

I wrote a blog entry back in December called "Kindle: gadget of mystery." In that piece, I listed unknowable details about the Kindle -- information that Amazon is concealing from everybody.

Now, it's March, 2008, and Amazon is still stubbornly hiding the most basic facts about the Kindle while trying at the same time to paint a picture of success based entirely on the very facts it conceals. For example: How many Kindles has Amazon sold?

Since the day the Kindle shipped, people who wanted to buy a one have been put on a waiting list -- often for more than a month and a half. In a recent earnings call, Amazon CEO Jeff Bezos said:

"Kindle is, in terms of demand, is outpacing our expectations, which is certainly something that we are very grateful for. It's also on the manufacturing side causing us to scramble. We're working very hard to increase the number of units that we can build and supply per week, so that we can get back-our goal is to get into a situation as quickly as we can where when you order a Kindle, we ship it immediately."

Why should we believe him?

Why is Bezos so aggressively hiding the actual numbers. Have they shipped millions? Thousands? Dozens? Has Amazon sold ten times as many Kindles as Sony has the PRS-500 Reader? Or one-tenth as many? We have no idea. None!

Is Amazon really working hard to ramp up production? Or is the company artificially creating a perception of high demand by playing games with production? If not, why hasn't it been able to fix the problem in four months? And since Amazon can't keep up with demand, why does it devote the very top center of the Amazon.com home page -- the most valuable real estate on the entire site -- to the creation of MORE demand?

Normally, I would be willing to trust a company like Amazon when its CEO and others in the company say popularity is to blame for their inability to keep up with demand. But Amazon's conspicuous, needless secrecy about unit shipments -- an act of secrecy that has become the "elephant in the living room" for e-book reader watchers -- makes me wonder.

Amazon: What are you hiding?

(Update: USA Today has a nice report today on this whole issue.)

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What People Are Saying

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a word from tha anal-retentive community

Submitted by intpete on March 12, 2008 - 12:25 P.M.

Dude, check ur grammar: to wit -

"people who wanted to buy a one"

"Kindle is, in terms of demand, is outpacing our expectations, which is certainly something that we are very grateful for"

On the second one, maybe Jeff actually said it that way. Looks to me like there are a lot of is's in there - maybe one too many.

nuff sed.

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childish criticism

Submitted by Anonymous on March 11, 2008 - 3:29 A.M.

It's non of your business.The only question is: is it good?
Stop being what you are.

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Building new E-Ink factories takes time

Submitted by Charbax on March 9, 2008 - 6:53 P.M.

Perhas Amazon should have built larger E-Ink factories before releasing the Kindle. Amazon chose to release the Kindle first and deliver whatever capacity that the E-Ink screen provider in Taiwan can provide and from that initial demand and response evaluate how much to invest in the expansion of the production capacity.

Building a new E-Ink factory probably costs a billion dollars or something like that. And it's not done from one day to the other.

Thanks to Amazon, for the first time ever, E-Ink technology is becomming in huge demand by the mass market. This is a revolution in and of itself, the mass production of E-Ink technology will bring down prices for the E-Ink display (currently expensive, around 200 dollars per screen is what I heard).

So thanks to Amazon, perhaps the price of the E-Ink screen will quickly be brought down to below 100 dollars.

Right now, Amazon does not have to lower the price since they cannot satisfy the worldwide demand. But when Amazon can expand E-Ink screen production capacity from a fwe hundred thousand per year before the release of the Kindle to millions per year with the Kindle, I am sure Amazon will not hesitate to accelerate demand even further by subsidizing the device, for example the Kindle could be sold for $99 with a 2-year Kindle Store content contract of around $20 per month to use in the Kindle Store. Everything about the Kindle is just rightly setup to provide this subsidization and content subscription model.

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Kindle numbers would be misunderstood

Submitted by Anonymous on March 10, 2008 - 1:24 P.M.

Even if we had Kindle shipment numbers - all we would know is that demand is at least X (a lower number than real demand) because Amazon cannot ship fast enough to keep up with demand. If it was my decision at Amazon, I would not give shipment numbers until a year after I was able to ship the same day an order was received - rather than confuse people about actual demand.

As both Kindle and Sony Reader cannot keep up with demand - production volumes of the display are most likely causing problems for both Amazon and Sony.

Unlike the iPod - which gets about $25 in iTunes content sales per device over its lifetime - I expect Kindles to generate $200 - 400/yr or $600 - to $1200 in content revenue over a Kindle's lifetime.

So there is more money for Amazon to make in content sales than device sales.

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Waaaah...why won't they tell us?!?!?!?!

Submitted by HeavyG on March 9, 2008 - 5:10 P.M.

I just love how many bloggers whine about amazon not releasing sales figures for the Kindle.

I also loved on release day how many people had written mostly negative reviews without ever actually having seen/used one.

Why should amazon tell us sales figures? If I was Bezos I would continue to keep it a secret just to see how many folks get their panties in a bunch by NOT releasing the numbers.

All I know is I ordered my Kindle on release day and LOVE the thing. It is one of my favorite tech gadgets and is in my bag with me every day. I couldn't give a flip whether the sales figure is 10,000 or 100,000 or 1,000,000.

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where are you pulling your

Submitted by me on March 9, 2008 - 11:31 P.M.

where are you pulling your numbers from? there's no way that screen is that expensive, there's no way amazon is paying spring $20 per month. the math doesn't work.

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top Sellars List

Submitted by Anonymous on March 9, 2008 - 3:40 P.M.

The Kindle has not varied from its number one listing in Amazon Bestsellers in Electronics from day one. This is very suspicious especially post X-mas!!!! And it's listed as not in stock. How can you be a best seller when there's no stock to sell?

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"Due to heavy customer

Submitted by Anonymous on March 9, 2008 - 5:48 P.M.

"Due to heavy customer demand, Kindle is temporarily sold out. We are working hard to manufacture Kindles as quickly as possible and are prioritizing orders on a first come, first served basis. Please ORDER KINDLE NOW to reserve your place in line. We will keep you informed by email as we get more precise delivery dates."

Directly from the website, I think that states it pretty clear. It still is the best seller, simply because you CAN place the order even though it is out of stock you can place an order. They are still fulfilling order as they come in.

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As you'll recall, Nintendo

Submitted by Shinsei on March 9, 2008 - 1:11 P.M.

As you'll recall, Nintendo was extremely tight-lipped about their production numbers for the Wii until just a few months ago. For the longest time, Nintendo wouldn't provide anything but sales numbers until finally someone cornered Reggie Fils-Amie with a Wiimote and forced him to provide production figures.

Given that I know a handful of people who have already purchased a Kindle and have generally said good things about it, I don't think it's unreasonable to take Amazon at their word on this.

Regarding the 'prime' real estate on amazon.com being used to drum up demand for a product that can't meet that demand, I'm not really sure why that's a bad thing. Should Nintendo just stop advertising the Wii worldwide (they did scale back ads in the UK due to shortages)? Should all mention of the Wii be removed from their website? Probably not.

Amazon, of all the web-based companies, has been extremely trustworthy in my book for years and their customer service regularly goes above and beyond what's 'required'.

Assuming Amazon is having production issues, four months isn't an unreasonable time frame to get that fixed. Neither is six. Nintendo's been trying to do it for a year and a half and still can't keep up.

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tinfoil hat

Submitted by Anonymous on March 9, 2008 - 1:10 P.M.

Time to take off the tinfoil hat.

I was able to get a kindle immediately.

Why are you suspicious? Because they didn't mention an actual number?

Do you also question if we landed on the moon? Do you think JFK was a plotted assassination by the CIA?

You seriously need to seek some help, mental and grammatical.

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