Hail Kindle: Amazon Says Sales Beating Projections

"We're grateful and excited that Kindle sales have exceeded our most optimistic expectations," Bezos wrote to Amazon shareholders in a letter posted to the company's Investor Relations home page. "If you haven't seen it, Kindle 2 is everything customers loved about the original Kindle, only thinner, faster, with a crisper display, and longer battery life, and capable of holding 1,500 books."

While Amazon hasn't released sales figures for the Kindle 2, which began shipping February 23, a source described as close to Amazon told The Washington Post this week that about 300,000 Kindle 2s have been shipped so far, which would put Amazon's take from the $359-a-pop devices at about $107 million.

Several analysts, including Mark Mahaney of Citigroup, have suggested recently that Amazon could see $1.2 billion in Kindle revenue by 2010.

Amazon's competitors for e-book and e-reading market share continue to try to claim some of Kindle's limelight, with Sony in particular trying to step up exposure of its Sony Reader through partnerships with Google and a new marketing campaign.

But Amazon itself isn't exactly slowing down. Amazon is already said to be at work on another, larger-screen Kindle specific to periodicals. Bezos confirmed in his letter that Amazon was continuing to invest "heartily" in new products as well as Amazon Web Services and tools for third party sellers such as its two-year-old Fulfillment by Amazon. Bezos said Amazon would also look to expand its reach in digital media in general, and push further into the market in China.

"Kindle is a good example of our fundamental approach," Bezos wrote. "Amazon had never designed or built a hardware device, but rather than change the vision to accommodate our then-existing skills, we hired a number of talented (and missionary!) hardware engineers and got started learning a new institutional skill, one that we needed to better serve readers in the future."