Amazon shares up after Kindle boosts e-book sales
NEW YORK (Reuters) - Amazon.com Inc shares rose on Monday after it posted strong growth in holiday season orders and said its customers bought more e-books than physical books for the first time ever on Christmas Day, thanks to its hot-selling Kindle electronic book reader.
Context & Ripple Effects
The Kindle has been building toward this quarter since at least January 2008, when Amazon's earnings call already flagged it as a hit alongside its fast-growing Web Services traffic. Through December 2009 the signals stacked up: Amazon reported its best-ever Kindle sales month, quietly ran out of large-screen Kindle DX units, and faced an open question from September about whether it would open the Kindle platform to outside developers.
Christmas Day supplied the proof point: per Reuters, more e-books than physical books were bought on Amazon for the first time ever, and shares rose Monday on strong holiday order growth. The timing matters because Scribd was simultaneously building an alternative delivery route for e-books, threatening what had been Amazon's sole sales channel for Kindle titles.
First-order effects
- Amazon enters the post-holiday stretch with the Kindle established as both a hardware seller and the demand engine for a digital bookstore that just outsold print on its biggest day of the year.
- Publishers now have their first clean evidence that device ownership converts directly into e-book purchases concentrated on a single retailer's platform.
Second-order effects
- Scribd's push to build an independent e-book delivery route gains urgency: if Kindle owners are the volume buyers, every rival channel needs either its own device or a way onto Amazon's.
- Competing reader makers face a holiday-season benchmark they must answer next year — the crossover day gives Amazon's ecosystem a headline metric rivals' catalogs cannot yet match.
Third-order effects
- If each holiday cycle converts another wave of gift recipients into e-book buyers, book retail structurally shifts toward a hardware-plus-storefront model where the device owner controls distribution — raising the stakes of the developer-platform question Amazon has so far left open.
The trend: Holiday gift-giving is turning e-readers into the gateway through which book buying tips from print to digital, with the device maker capturing the storefront.