Amazon Kindles Investor Interest
But gadget's only part of the story.
But Citi (C) Investment Research said Monday afternoon that it now expects the Kindle to sell 380,000 units - double the 190,000 it previously projected. Citi's analyst went on to liken the device to Apple's (AAPL) iPod, saying that the Kindle could "contribute $1 billion in sales by 2010."
Investors obviously liked what they heard: The stock shot up more than 7 points on the news.
But I doubt the Kindle's worth getting quite so excited about: Even if it generated $1 billion in revenue by 2010, it would still account for only a small percentage of the organization's total revenue (4%).
And while I do think the Kindle is certainly an attractive gadget, I think the real story lies in Amazon's second-quarter numbers. As I've said before, I admire the company's ability to hold its margins relatively stable. I was also encouraged by its third-quarter sales forecast, which was essentially in line with expectations.
Put another way: Maybe there really is something to this whole "Internet" fad.
In the weeks ahead, I think other analysts may follow, sheep-like, and start talking up the device. This in turn could draw some retail and institutional interest in the stock.
Inquiring minds will definitely want to check out Toddo's comments on Kindle, and keep in mind that there's always the chance that a competitive offering could come to market.
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