Amazon.com Creates Kindle Buzz With Secretive Press Conference – Bloomberg

 

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Is this the new Kindle 2? It is, according to the Boy Genius Report

 

By Joseph Galante

Feb. 8 (Bloomberg) — Amazon.com Inc. is holding a press conference at the Morgan Library and Museum in New York tomorrow, fueling speculation that the company will release a new version of the Kindle, its electronic-book reader.

Amazon.com hasn’t given a topic for the event, hosted by Chief Executive Officer Jeff Bezos. Still, blogs and analysts say the timing is right for a new Kindle. The current model sold out before the holidays — the second year in a row that demand eclipsed supply.

“It almost seems self-evident they’re going to release the Kindle,” said Jim Friedland, an analyst at Cowen & Co. in New York. “It makes sense. The Kindle has been out of stock on Amazon since late November.”

An Oprah Winfrey endorsement in October fueled pre-holiday sales of the device, which debuted in 2007. Seattle-based Amazon.com, the world’s biggest Internet retailer, has been secretive about sales of the Kindle, saying only that consumer demand has surpassed expectations.

The paperback-sized gadget, which sells for $359, lets users download books and newspapers onto a high-resolution screen with a white background and black text — imitating the look of a real book.

Amazon.com will make about $1.2 billion in sales from the Kindle by next year, according toMark Mahaney, an analyst at Citigroup Inc. That’s about 4 percent of Amazon.com’s total revenue. Collins Stewart LLC analyst Sandeep Aggarwal said the company will generate $1.4 billion from Kindle sales and book downloads by 2010.

Longer and Thinner?

The new Kindle is likely to be longer and thinner, with buttons that make accidental page turns less likely, Mahaney said. Users can currently download most best-sellers on the Kindle for $9.99. Amazon.com spokesman Drew Herdener declined to comment.

The Boy Genius Report, a technology blog, posted pictures in October of what it claimed to be the Kindle 2. The device had rounded edges and a joystick instead of a scrolling wheel.

Amazon.com has risen 30 percent this year in Nasdaq Stock Market trading, while the Standard & Poor’s 500 Index has fallen 3.8 percent.

The Kindle has the potential to become the industry standard for digital books as sales of the device surge, Aggarwal said.

Sony Competition

Sony Corp. also offers an electronic reader, which sells for $299. It hasn’t seriously threatened Amazon.com’s Kindle sales, Friedland said.

Google Inc. is also emerging as a competitor. The company said last week that more than 1.5 million books from Google Book Search are now available on mobile phones. After that announcement, Amazon.com said it’s working to make Kindle books available on a range of mobile devices.

David Wong is eagerly awaiting the new version of the Kindle. The 33-year-old pianist has wanted to buy one since he received the original version eight months ago as a gift.

“I think it’s going to be really cool,” said Wong, who lives in Berkeley, California.

Amazon.com, which started as an online bookstore in 1995, has branched out into music, clothing and dozens of other categories since then. Kindle, whose name plays on the idea of starting a fire, is Amazon’s bet that more people will want to read books electronically, Bezos said in 2007.

Kindle has about 230,000 book titles available. The average Kindle user buys approximately 1.6 electronic books for every traditional book they buy, the company said.

Amazon.com ran out of Kindles less than six hours after first releasing the device. It struggled again last year to keep up with demand, after Winfrey called it her “favorite new gadget” on her television show.

Given Amazon.com’s usual efficiency, it’s unlikely that the inventory shortage was an oversight, Friedland said. It may have been part of an effort to build a buzz around the Kindle.

“My guess is it was a strategic decision,” he said.

To contact the reporter on this story: Joseph Galante in San Francisco atjgalante3@bloomberg.net

To order the fantastic Kindle now before tomorrow’s onslaught, click here Kindle: Amazon’s Wireless Reading Device

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