The well-known American investment bank Morgan Stanley issued a forecast report last week saying that by 2015, the sales of Amazon's Kindle e-reader and tablets could reach $5.5 billion.
Since Amazon launched its Kindle, the company has rarely disclosed detailed sales data for this device. However, Morgan Stanley made predictions about the growth in Kindle sales based on relevant data published by Amazon. Morgan Stanley expects that this year the scale of sales for Kindle e-readers and tablets could increase to $4.5 billion, growing by 26% compared to 2012.
Morgan Stanley also anticipates that the sales growth of Kindle products will slow down in 2014, with the sales scale reaching $5 billion; in 2015, the device is expected to experience moderate growth again, with the sales scale being $5.5 billion. Not long ago, Amazon cut the price of its 7-inch Kindle Fire HD tablet. This price adjustment by Amazon might be due to unsatisfactory Kindle shipment volumes in the second quarter of this year, or it could be paving the way for the launch of new products, or possibly both reasons combined.
Of course, Amazon is willing to incur losses in the sale of Kindle hardware, with the aim of boosting the sales volume of hardware devices, thereby increasing the market demand for Kindle digital content (such as e-books, movies, games, and other content), and ultimately making profits from this business. Morgan Stanley estimates that this year Amazon's digital media business sales will reach $3.8 billion, and it is projected that next year the corresponding sales will reach $5.7 billion. In other words, the sales of its digital media business will exceed the sales of Kindle hardware itself next year.
Morgan Stanley stated that overall, Amazon's Kindle ecosystem (including $192 million in advertising revenue) will account for 11% of the company's total revenue this year and 23% of its operating profit.