Amazon's Kindle e-readerMario Tama
Amazon.com Inc. shares rose Monday after it posted strong growth in holiday season orders and said its customers bought more e-books than physical books for the first time ever on Christmas Day, thanks to its hot-selling Kindle electronic book reader.
The U.S.-based Internet retailer said over the weekend its Kindle reader had become the most-purchased gift in the company's history.
While Amazon does not disclose specific sales data for the Kindle, it is believed to be the market leader among growing competition from devices sold by Sony Corp. and Barnes & Noble Inc.
With electronic readers one of the hottest selling items over the holidays this year, the Kindle also gained ground as both Barnes & Noble and Sony were unable to keep up with demand. The two companies both sold out of their stock of readers more than a month before Christmas.
The Kindle Store now includes more than 390,000 books, Amazon said. The company also provided details on its holiday season sales, saying that Dec. 14 was its peak shopping day with more than 9.5 million items ordered worldwide.
On the peak day of the season, Amazon said it shipped more than 7 million units.
Lazard Capital's Colin Sebastian called Amazon's holiday performance "remarkable," and said Amazon's 51 per cent growth in peak-day items ordered and about 25 per cent growth in peak-day unit shipments pointed to further market share gains.
He raised his fourth-quarter revenue estimate on Amazon to $9.35-billion (U.S.) from $9.09-billion to factor in the faster rate of growth in items ordered against units shipped, and stable foreign exchange trends.
"The marketplace growth is likely driving better margins," he said in a note to clients.
Based on e-commerce checks during the holiday season, Lazard sees online sales in the period rising by 5 per cent or slightly more industry-wide, with mid-single-digit percentage growth for 2010.
Mr. Sebastian maintained his "hold" rating on Amazon shares as the current valuation "embeds significant revenue growth and margin expansion over the coming years."
Amazon said its best-selling items over the holiday season other than the Kindle included Apple Inc.'s iPod Touch, Nintendo Co. Ltd.'s Wii Fit Plus with balance board, Sarah Palin's book Going Rogue and men's Levi's 501 jeans.