First-order effects

• Investors get their first concrete sizing of the Kindle franchise: roughly half a million units in year one and a potential $1.2 billion revenue line for next year, from an analyst rather than Amazon itself.
• The estimate raises the bar for next week's Kindle 2.0 unveiling — the new model now has to justify a growth trajectory toward that $1.2 billion figure.

Second-order effects

• Rivals in the nascent e-reader market face pressure to match Amazon's scale and price points, while publishers gain leverage knowing e-books are becoming a material channel.
• If the device keeps selling, Amazon's incentive shifts toward subsidizing hardware to drive e-book sales — a dynamic that later showed up when Kindles got cheaper even as they grew into a much larger share of Amazon's business (10 percent of Amazon's revenue by 2011).

Third-order effects

• The pattern points toward a razor-and-blades structure for digital reading: devices sold at thin margins as gateways to recurring content revenue, with Amazon controlling both ends.
• Analyst estimates standing in for corporate silence could become routine for Amazon's device line — a gap between reported and actual figures that persisted for years, including later reports that Amazon exceeded Kindle sales estimates by wide margins (60 percent above estimates in 2010).