Amazon Shares Rise as Kindle Sales Catch Fire
Citigroup said on Monday that Amazon.com's Kindle electronic book reader appears to be selling much better than expected and could double a previous estimate for units sold this year, sending shares in the online retailer up 9 percent.
With few cool new gadgets expected on the market, the Kindle could be one of the top electronics gifts of the upcoming holiday season, along with Apple's newest iPhone, Citigroup said.
"Turns out the Kindle is becoming the iPod of the book world," Citigroup analyst Mark Mahaney wrote in a note to clients. He kept a "buy" rating on the share.
Mahaney estimates Amazon will sell up to 380,000 Kindles in 2008, up from a previous forecast of 190,000, noting that adoption rate would be similar to the first year of sales for Apple's media-playing iPod. He sees Amazon selling up to 150,000 Kindles in the fourth quarter alone.
Mahaney also expects Kindle and related revenue of more than $1 billion by 2010, compared with a previous view of $400 million to $750 million.
Amazon shares were up $7.51 at $88 in midday trading.