By Seeking Alpha
Amazon launched its Kindle e-reader in late 2007. Assuming a 3-year replacement cycle, we conclude that there may be approximately 30 million Kindle e-readers currently in use. Looking at the Kindle library, it is easy to notice that most e-books are priced between $4 and $10, with a slight skew towards lower-priced books. Therefore, we assume average price per e-book at $6 for the purpose of estimation. Additionally, we also know that Amazon gets a 30% cut on sales of most e-books, with remaining 70% going to the publisher. Keeping these figures in mind and the assumption of 5 e-books sold annually per Kindle e-reader owner, we arrive at annual revenues of close to $265 million. If we assume a figure of 10 e-books sold annually per Kindle e-reader owner, the annual sales will amount to $530 million.