Jeff Bezos doesn't mind telling analysts and investors millions of people own Kindles. How many have been sold? That's another question.
Despite a Q4 earnings report top heavy with Kindle factoids, the e-reader is still too small a part of the company's sales to break out as a separate number. That's not a reflection on the Kindle: a few million e-readers is a small line item in a company with $9.5bn in net sales for Q409. So Amazon doesn't have to say how Kindle is really selling. Unfortunately.
Amazon does have plenty of other numbers in an earnings report that may also play up just how nasty last year was for so many companies: that $9.5bn in net sales is up 42% over $670m in Q408.
Even without a $354m favourable impact from foreign exchange rates changes, the increase would be a striking 37%. Zappos, the retails company acquired last year, added $200m to Q4 revenue. Amazon's net income rose 71 percent over Q408, to $0.85 per share from $225m, or $0.52 per share in Q408. Analysts polled by Thomson Reuters expected earnings of $0.72 per share on revenue of $9.04bn. The impressive results helped Amazon avoid a post-iPad announcement slump: shares are trading up after hours.
Earnings call: Bezos made a cameo appearance in the press release but not for the call. That's not unusual but it's more fun when he's on. CFO Tom Szkutak explained some accounting changes in the way Kindle will be recognised going forward: Sales are "considered arrangements with multiple elements which include the device, wireless connectivity and software upgrades."
Device revenue, which is the a "substantial portion" of the total price will be recognized on delivery. Revenue for the Whispersync wireless connectivity and software upgrades will still be amortized over the estimated two-year life of the device. Amazon had amortised about $500m of deferred revenue between 2001 and 2011.
—Media sales and competition: Media revenues were up 26 percent but analysts expressed some concern about the ability to sustain substantial growth with increasing competition, particularly on the ebook side.
Szkutak: "We think we are positioned very nicely from a digital perspective. ... We think we are focused on the customer and I think Kindle is certainly a good example of that. We think we've built a very-nice purpose-built device ... that is purpose-built for reading and we believe that readers deserve to have a dedicated device with great selection and great prices."
Szkutak declined to speculate on whether Amazon could sell media as a bundle or in combined store, rather than the current silos: "We are focused on what is right for customers and many of those have distinct customer sets that are different from each other and we are focused on how to make that experience great."
—Kindle numbers: Inevitably, the question about Kindle devices sold came up in various forms. Asked by one analyst to confirm that the Bezos reference to "millions" of Kindle users means it's safe to assume more than 2m Kindles have been sold, Szkutak stuck with the playbook. No details about international-domestic split either.
—iPad: Szkutak said Kindle (which has the number one e-reader app in the iPhone store just now) will be on the iPad, but didn't reveal any more details.
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