Amazon Delivers A Great Christmas For Its Kindle

By: Mary Ellen Gordon, PhD

December 27, 2013 |

In less than a decade, connected devices have become an integral part of Christmas. They are commonly wished for and given as gifts, and Christmas is the biggest day of the year for new device activations. That tradition continued this Christmas, with device activations up by 63% compared to an average day in the first three weeks of December.

To identify what types of devices are most gifted, we compared new device activations on Christmas to the average for the first three weeks of December. This approach adjusts for the fact that the smartphone and tablet installed base is growing all the time, and therefore a large part of the difference between one Christmas and the next is a result of growth in the installed base rather than increased Christmas giving.

The chart below shows the smartphone and tablet manufacturers that experience the greatest increase in activations on Christmas compared to a typical December day. For the past three years, Amazon has been the brand of device that has experienced the largest bump in Christmas activations compared to its normal level of activations.


We believe price, business model, target market, and form factor all contribute to the big boost in Kindle activations at Christmas relative to other times of the year. Amazon sells Kindle tablets at cost, putting them within the Christmas budgets of more people than some other devices. The reason Amazon sells tablets at cost is that for them tablets are a channel for promoting physical goods and promoting and delivering digital content. That same retail business model means that Amazon is top of mind for many consumers during the holiday season, giving it lots of opportunity to promote its tablets as Christmas gifts. As we discussed prior to Christmas, Kindle’s new Mayday button makes it a particularly good gift for mobile newbies, and Amazon’s mass-market reach makes it available to those people. Last but not least, as we show subsequently, tablets in general, and WiFi tablets in particular, are the form factor that does best at Christmas, and many Kindles tick both of those boxes.

The combination of form factor and relatively low price probably also helps explain why Acer experiences a greater lift in Christmas activations than many other manufacturers, though the size of that bump is still only a fraction of what Amazon experiences.

In each of the past three years, Apple has experienced a larger Christmas lift than Samsung; however the gap between them narrowed this year compared to previous years. While the magnitude of the Christmas increase is smaller for these manufacturers than for Amazon, their baseline level of activations is so large that even a doubling of daily activations on Christmas (1.9x for Samsung and 2.3x for Apple this year, according to our data) represents a large number of devices.

Overall, while still significant, we can see that the size of the Christmas activation bump has declined over time for most manufacturers who ever had one. Even Amazon has dropped from forty-one times its baseline activations on Christmas 2011 to twenty-four on Christmas 2013. This is likely to be due to the increased overall penetration of smartphones and tablets, and is expected in a maturing industry. With more people having smartphones and tablets there are fewer new users to give them to, and giving to existing users is more challenging since existing users are already tied into carrier contract renewal cycles, app ecosystems, etc.

As shown below, in each of the past three years WiFi tablets have been the most gifted devices, with activations this year more than six times greater on Christmas Day than on an average day in the first three weeks of December. Smartphones are the least gifted connected device form factor with cellular-enabled tablets in between. We believe WiFi tablets are the preferred connected device gift since they work out of the box. Cellular-enabled tablets and smartphones require a data plan, creating an adult gift recipient version of children receiving toys with “batteries not included”. WiFi tablets also tend to be among the least expensive connected devices, making them more accessible gifts for more people.


Yesterday CNET predicted that Amazon will come out with a smartphone in 2014. We agree. Three of the four factors that help boost Kindle sales at Christmas – price, business model, and target market – also imply that it would make sense for Amazon to have a smartphone in its connected device portfolio. Whether it arrives by reindeer or drone, you may find one in your stocking next year.