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I know we all keep saying that the next generation is a ways off, but I found this an interesting observation on why there is such a backlog on Kindle orders (the article is on the Motley Fool website and is written by a Kindle owner):


Who Is Buying These Kindles?
By Rick Aristotle Munarriz
December 5, 2008 | Comments (0)

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If you want an Amazon.com (Nasdaq: AMZN) Kindle for the holidays, you won't find it at Amazon.com itself. The site has been sold out of new units for two weeks. Interested buyers are being told to get in line because fresh units won't ship for another 11 to 13 weeks.

So where are folks turning to get their e-book reading fix?

Sony (NYSE: SNE) is the most obvious alternative. The company claims to have sold 300,000 units of its Sony Reader since its inception, in the ballpark of how many Kindle units are in the wild. Amazon has never come clean with an actual number, though market watcher Forrester Research pegs the tally at 400,000.

However, many high-tech bookworms won't settle for anything less than the Kindle. Opportunistic early adopters who paid as little as $259 may have tired of the gadgets and are now cashing in.

Over on eBay (Nasdaq: EBAY), several hundred units are being sold, with sellers asking as much as $899.98. That's the asking prices, but scrolling through some recently concluded transactions shows that some poor saps have actually paid even more than that in recent days.

Third-party merchants on Amazon.com are selling it there, with used units going for as little as $450.

Again, more poor saps.

Why are folks buying something that Amazon is going to be mysteriously out of stock of for the next three months? Isn't it obvious that Amazon simply cleared out the last of its first-generation Kindles last month, clearing the way for new and improved units that will be out early next year? Even Apple (Nasdaq: AAPL) does this, though it typically likes to narrow the gap to keep outages as brief as possible.

It would be great to hear Amazon publicly say this. It's not as if the company is profiting from the resale, right?

Well, not exactly. For starters, Amazon is obviously charging what are now 31 different sellers on its store a transaction fee on any used Kindle resales. Amazon would also benefit from having resellers with unopened units. Selling them off will further open the floodgates of incremental revenue in purchases of Kindle books, blogs, and newspapers through Amazon.com. Finally, stirring the Kindle resale pot sure beats sending book lovers to Sony, or -- gee -- old-school books at the local Barnes & Noble (NYSE: BKS) or Borders (NYSE: BGP) before those relics go out of business.

Still, Amazon has never been as chatty about its Kindle as it should. Sure, CEO Jeff Bezos had his Oprah moment back in October. However, Amazon has never told the public how many Kindles have been sold, and now the company isn't being more explicit about the current shortage and the timeline or features of the next generation.

The end result of the silence? Suckers, overpaying for a device that can be had fresher, better, and cheaper at a fraction of today's resale prices before too long.
 

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He's a little harsh, don't you think? Calling us all suckers?

I truly believe that Amazon is putting its energy in opening up the international market and version 2 is a long ways off. That's my opinion and I'm sticking to it.

L
 

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Yeah, I think he's a little harsh, but I think mostly "suckers" refers to those paying exorbitant prices from re-sellers.  Everyone knows that we can't be suckers - we may be obsessed but we paid a fair price for our obsession.  ;D

Katiekat
 

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I think Amazon tried to be fully stocked for the holidays, but Oprah just overwhelmed them. No one can ramp up that quickly for the demand that she generates.

Steve
 

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"Isn't it obvious that Amazon simply cleared out the last of its first-generation Kindles last month"

No. It may be one reasonable explanation, but it's still an inference.

"Even Apple (Nasdaq: AAPL) does this, though it typically likes to narrow the gap to keep outages as brief as possible"

Absolutely. Maybe Apple is better at planning than Amazon.

"Amazon is obviously charging what are now 31 different sellers on its store a transaction fee on any used Kindle resale"

Don't they charge all sellers a transaction fee? What's significant about Kindles resales?

"Still, Amazon has never been as chatty about its Kindle as it should"

Who decides how chatty they should be?

"and now the company isn't being more explicit about the current shortage and the timeline or features of the next generation"

No reason why they have to be. Why should they tell competitors what they will be doing in the future?

Fact is, we don't know why there is a shortage. It could very well be display supply issues (or some other component). It could indeed be the gap between production of old and new models, but that article (as quoted) provides no information with which to conclude this. It's guesswork to fill out an article.

But I would tend to agree that the people who buy Kindles on eBay for $900 are suckers (unless otherwise specified).
 

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I am SO happy I ordered when I did -- day after Oprah announced.  Sundog arrived on Halloween making it my best treat (even if I had to pay for him).
 
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I think it's perfectly logical they ran out of Kindles right before Christmas.  Amazon is not really an electronics retailer.  The kindle is their first venture into this market so they underestimated demand and then Oprah pushed them way over the top.

If you remember a couple of years ago, Nintendo had the samething happen with the Wii.  Electronic devices is their specialty and they got overwhelmed by demand.  I don't see any Wii 2s out there yet.

Even if they do surprise us(and I doubt they will) and whip out a V2 Kindle, how many of us will run out to get one?  I am perfectly happy with the one I have.  The V2 will have to have some major improvements besides folders before I toss my current 2 week old Kindle.
 

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It can still be hard to get a WII right now! That was way more popular than anyone thoughtr it would be...

And I think you are right, Amazon simply got overwhelmed with the demand (and their is probaly a suplly issue on some oparts too).

I, like you, probably wonlt get a version 2 unless there are some major improvements... I love my version 1.
 

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Vampyre said:
I haven't even seen a Wii yet except for on TV or in catalogs.
I got my son one when they first came out - very cool machine. he was taking ti back and froth from my house to my parents (the folks love it too) until I got them one.

Nintendo was not prepared at all for how well it would be liked by the non-traditional gamers.
 

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Yeah, I still don't have a WII.... I haven't actively searched one out, but if I came across one in a store I would grab it. Amazon has never had them in stock for more than a minute. I am on the wireless messaging for the Amazon.com stock, and by the time I get to the website, they are all gone.

As for Kindle 2.0, I like the one I have. I don't use it as anything but a book reader, so I don't need it to have any new features. My iPhone does everything else I need, and more.
 

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Vampyre said:
Even if they do surprise us(and I doubt they will) and whip out a V2 Kindle, how many of us will run out to get one? I am perfectly happy with the one I have. The V2 will have to have some major improvements besides folders before I toss my current 2 week old Kindle.
I wouldn't rush to order a new version of the Kindle, but if it were acceptable from a design/features standpoint, I would put it on my list for buying in the next several months so I could give my present one to my brother, who is more than mildly annoyed that I can't loan him books any more. :(

Mike
 

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I really don't think the main features I want will even be avialable in version 2 (at least not if it come out anytime soon)... I will more than likely just skip that version anyway...

Plus, I am perfectly happy with my current Kindle...
 

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Hey, I'm no sucker! I saved 50 bucks thanks to the Oprah sale. I'm aware that there'll eventually be a Version 2, and I did weigh that factor in when I was considering my purchase. Ultimately, I decided I didn't want to wait any longer for a Kindle. I bit the bullet during the final hours of the Oprah sale. I had to wait a bit longer to get my Kindle, but I received it two weeks later and couldn't be happier.

As for Wii, I got lucky last year and happened to be at a mall the day one of the stores put up a sign announcing that there were five in stock. I'd never even seen one up until that point. Needless to say, I grabbed it and have loved it ever since.
 

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CS said:
As for Wii, I got lucky last year and happened to be at a mall the day one of the stores put up a sign announcing that there were five in stock. I'd never even seen one up until that point. Needless to say, I grabbed it and have loved it ever since.
That's exactly what happened with my husband. He saw one, grabbed it and it was a great Christmas present for the family last year. I never even knew what it was but became the family bowling champ. LOL.

This year, I have an extra remote, two Wii wheels, and Mario Kart on their way to the house, so that will be this year's big present for everyone.

L
 

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CS said:
As for Wii, I got lucky last year and happened to be at a mall the day one of the stores put up a sign announcing that there were five in stock. I'd never even seen one up until that point. Needless to say, I grabbed it and have loved it ever since.
That is pretty much the way I got my Wii at Best Buy. Right place, right time. Haven't regretted that purchase or the purchase of my Kindle either.
 

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jmiked said:
"Isn't it obvious that Amazon simply cleared out the last of its first-generation Kindles last month"

No. It may be one reasonable explanation, but it's still an inference.

"Even Apple (Nasdaq: AAPL) does this, though it typically likes to narrow the gap to keep outages as brief as possible"

Absolutely. Maybe Apple is better at planning than Amazon.

"Amazon is obviously charging what are now 31 different sellers on its store a transaction fee on any used Kindle resale"

Don't they charge all sellers a transaction fee? What's significant about Kindles resales?

"Still, Amazon has never been as chatty about its Kindle as it should"

Who decides how chatty they should be?

"and now the company isn't being more explicit about the current shortage and the timeline or features of the next generation"

No reason why they have to be. Why should they tell competitors what they will be doing in the future?

Fact is, we don't know why there is a shortage. It could very well be display supply issues (or some other component). It could indeed be the gap between production of old and new models, but that article (as quoted) provides no information with which to conclude this. It's guesswork to fill out an article.

But I would tend to agree that the people who buy Kindles on eBay for $900 are suckers (unless otherwise specified).
I like your analysis, JMiked!

Marci
 
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Wow, that article writer sounds like a real jerk. Perhaps he's one of the folks who didn't get theirs before they went out of stock? Sure smells like sour grapes to me!
 

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I think the shortage is still due to the Oprah effect. A lot of people took advantage of the discount, myself included, Harper arrived on Halloween. Then those people told all their friends about this awesome gadget, and voila, you have the trickle down Oprah effect. Personally, I love this version and I don't think I'll buy any newer version until Harper dies (gasp!). It performs its fuction as an ereader very well and downloading books in seconds via Whispernet is even better than I expected (much harder on the pocketbook than I expected, too-that darn one-click).
 
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