In an interview with John Markoff and David Pogue, Steve Jobs explains why he doesn't think Kindle will do well:
“It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore. Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.”
I don't know the numbers, but I'm guessing that Steve Jobs is suggesting that 60% of American adults haven't picked up a book at all in the last year. Could be, but then what's he really saying here? That Amazon can't make a business of selling books because too few people read them?
Hmmm.
This is their market after all. My guess is that of Amazon's customers a large portion read and buy books. So what's going on here with Kindle is that Amazon is selling a premium product to its customers. Seems as a reasonable upstream approach for them.
Time for some numbers. There are 300+ million people in the US. Of those, I think I've read that about 70% are adults. So that's about 210 million. Now taking Jobs' 40% number, that gives a market of approximately 80 million adult book readers. From these, let's say a third are avid enough readers that they'd be interested in a Kindle type device. So now we're down to 24 million or so. And then let's figure that 2% of these people each year might actually purchase one--that's about 500K units a year. At $400 each that's a couple hundred million a year in revenue. Not bad.
Of course, Amazon can go the other way with this calculation and start with its number of top book purchasers and take a percentage of them to see if it's a big enough number. To me, I'd take the risk even if it weren't. But that's just me.
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