Amazon’s Planned Front-Lit Kindle Helps Travelers, Night Readers

The Amazon (NASDAQ:AMZN) Kindle is one of Amazon’s biggest hits to date. It has dominated the company’s bestselling consumer electronics list for months, and generates a significant amount of revenue for Amazon. More importantly it helps drive the sales for its content. The Kindle was first intended as a simple e-reader, but Amazon has launched several versions of the device since and also launched a tablet recently. ((Amazon aims to launch front-lit Kindle in July, MSN)) Amazon competes primarily with Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) in the e-book space.

See our full analysis for Amazon’s stock here

Amazon is reportedly planning to launch upgraded versions of the Kindle e-reader and tablet later this year, before the holiday shopping season. What’s interesting is that the new version of the Kindle e-reader may have front lighting, which will enable users to read books even in the dark.

While adding front lighting may take away some of the key benefits that the Kindle offers, such as zero strain reading and a 30-day battery life, it would also be the preferred choice for users who like to read at night or those who travel often on planes or trains and don’t want to purchase an attachable light. Amazon will continue to offer standard E-ink Kindles too.

We think this is a pretty wise move and will enable Amazon to boost its Kindle sales by targeting yet another segment of the market.

Though the Kindle hardware business is a low-margin business for Amazon, accounting for around 3% of its overall value, we expect increased Kindle sales to drive Amazon’s core business – selling e-books and other multimedia content online, which accounts for nearly 23% of its total value.

We have a $22 Trefis price estimate for Amazon, which stands near its current market price.

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