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Amazon sold more ebooks last year than paperbacks

Amazon released their Q4 statement today, and it was a doozy. Amazon sold 115 ebooks last year for every 100 paperbacks. Ad they sold 3 times as many ebooks as they did hardbacks. What’s even better is that those numbers cover all of 2010, not just this last quarter.

Amazon are also reporting that the Kindle Store grew to over 810k titles, and that they sold "millions of Kindles" in Q4.

From the press release:

Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its fourth quarter ended December 31, 2010.

Operating cash flow increased 6% to $3.50 billion for the trailing twelve months, compared with $3.29billion for the trailing twelve months ended December 31, 2009. Free cash flow decreased 14% to $2.52 billion for the trailing twelve months, compared with $2.92 billion for the trailing twelve months ended December 31, 2009.

Common shares outstanding plus shares underlying stock-based awards totaled 465 million on December 31, 2010, compared with 461 million a year ago.

Net sales increased 36% to $12.95 billion in the fourth quarter, compared with $9.52 billion in fourth quarter 2009. Excluding the $139 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 37% compared with fourth quarter 2009.

Operating income was $474 million in the fourth quarter, compared with $476 million in fourth quarter 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $18 million.

Net income increased 8% to $416 million in the fourth quarter, or $0.91 per diluted share, compared with net income of $384 million, or $0.85 per diluted share, in fourth quarter 2009.

"Thanks to our customers, we achieved two big milestones," said Jeff Bezos, founder and CEO of Amazon.com. "We had our first $10 billion quarter, and after selling millions of third-generation Kindles with the new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Amazon.com. Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected – and it’s on top of continued growth in paperback sales."

Full Year 2010

Net sales increased 40% to $34.20 billion, compared with $24.51 billion in 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on net sales was $86 million.

Operating income increased 25% to $1.41 billion, compared with $1.13 billion in 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $28 million. In 2009, operating income was negatively impacted by a $51 million legal settlement.

Net income increased 28% to $1.15 billion in 2010, or $2.53 per diluted share, compared with net income of $902 million, or $2.04 per diluted share, in 2009.

Highlights

  • Amazon.com is now selling more Kindle books than paperback books. Since the beginning of the year, for every 100 paperback books Amazon has sold, the Company has sold 115 Kindle books. Additionally, during this same time period the Company has sold three times as many Kindle books as hardcover books. This is across Amazon.com’s entire U.S. book business and includes sales of books where there is no Kindle edition. Free Kindle books are excluded and if included would make the numbers even higher.
  • The Company sold millions of third-generation Kindle devices with the new advanced paper-like Pearl e-ink display in the fourth quarter and the third-generation Kindle eclipsed "Harry Potter and the Deathly Hallows" as the bestselling product in Amazon’s history.
  • The U.S. Kindle Store now has more than 810,000 books including New Releases and 107 of 112 New York Times Bestsellers. Over 670,000 of these books are $9.99 or less, including 74 New York Times Bestsellers. Millions of free, out-of-copyright, pre-1923 books are also available to read on Kindle.
  • Amazon added to its growing list of "Buy Once, Read Everywhere" Kindle apps, launching a Kindle app for Windows Phone 7. In addition, the Kindle for Android app was updated to enable users to buy, read and sync over 100 Kindle newspapers and magazines. All Kindle apps let customers "Buy Once, Read Everywhere"–on Kindle, Kindle 3G, Kindle DX, iPad, iPod touch, iPhone, Mac, PC, BlackBerry and Android-based devices. All Kindle apps are free and incorporate Amazon’s Whispersync technology, which allows readers to seamlessly switch between devices. With Kindle Worry-Free Archive, books purchased from the Kindle Store are automatically backed up online in the Kindle library on Amazon where they can be re-downloaded wirelessly for free, anytime.
  • The Company announced Price Check for iPhone, a new price comparison app that provides shoppers an easy way to compare in-store prices with the low prices from Amazon.com and other online merchants. Shoppers can use the app to scan a barcode, snap a picture, or say or type a product name to instantly see online prices for that item. Over the Black Friday-Cyber Monday weekend, mobile shoppers used Price Check to look up prices over a million times. In December, shoppers used the app more than two million times to check prices.
  • North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.21 billion, up 45% from fourth quarter 2009.
  • International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese and Italian sites, were $5.74 billion, up 26% from fourth quarter 2009. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 29%.
  • Worldwide Media sales grew 12% to $5.23 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 13%.
  • Worldwide Electronics & Other General Merchandise sales grew 60% to $7.39 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 62%.
  • The Company launched Amazon.it, an Italian-language website offering customers a vast selection of books, DVDs, video games, music and consumer electronics at everyday low prices. Amazon.it’s convenient services include Amazon Prime, the membership program with unlimited free guaranteed 2-3 day delivery at an annual fee of 9.99 Euros. The first product sold on Amazon.it was a Canon Pixma printer to a new Prime customer in Turino, Italy.
  • Amazon Web Services (AWS) announced lowered usage pricing on existing Premium Support offerings by 50% and added two new support plans to meet the needs of developers and enterprises of all sizes and technical ability. In addition to the existing Silver and Gold support plans, AWS now offers a Bronze support plan for $49 per month and a Platinum support plan that provides 15 minute response times and dedicated Technical Account Managers.
  • AWS achieved Level 1 Payment Card Industry (PCI) compliance, continuing its commitment to providing the security certifications developers and enterprises care about. Merchants and other service providers can now run their applications on AWS PCI-compliant technology infrastructure to store, process and transmit credit card information in the cloud.
  • AWS launched Elastic Beanstalk, an easy way for developers to quickly deploy applications to AWS and manage applications in the AWS cloud. Elastic Beanstalk automatically scales up and down as needed so developers don’t need to worry about configuring their infrastructure requirements in AWS. Unlike existing application containers or "platform as a service" offerings that force developers to accept infrastructure decisions pre-determined by the vendor, Elastic Beanstalk allows developers to "open the hood" to tinker with the AWS resources powering their applications. AWS customers can now choose to have as much automation or as much control as they wish.

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Comments


ReaderWar January 27, 2011 um 6:33 pm

At first this was striking, but then I started thinking about ALL the Amazon apps NOT on the Kindle out there and ALL of the people buying the free titles. Because you do buy them, it’s a $0.00 transaction.

I’d like the sales numbers w/o those free titles figured in. Although free titles still signal demand, they don’t account for the sweet spot people will pay.

Nate the great January 27, 2011 um 6:40 pm

I had that same thought, so i read it very carefully. Free ebooks aren’t counted in those numbers.


Richard Adin January 28, 2011 um 8:27 am

Yet with all these great numbers, Amazon didn’t meet street expectations and margin is down approximately 2%. Seems to me, it does no good to sell 1 million ebooks if you don’t make a profit on them, but then what do I know about business.


MC January 29, 2011 um 5:07 pm

You’re misunderstanding. The stats about paperback sales and the hc/ebook ratio apply to the past month, in 2011–not to fiscal 2010. "Amazon.com is *now* selling more Kindle books than paperback books. Since the *beginning of the year*…" Not the fiscal year, the calendar year.

As they tip in the Bezos quote, they predicted this would be achieved in Q2 2011, and has been achieved in Jan 2011 instead, not over the prior fiscal ("Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected")

Nate the great January 30, 2011 um 2:06 pm

You’re probably right. I think I fell for Amazon’s trick this time; usually I’m more careful.


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