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Did Amazon Nuke eReader Market with Kindle Fire?

By - Source: DigiTimes

The number of Kindle and Kindle Touch units has dropped from 9 million to 2 million in 1Q12 thanks to the Kindle Fire.

If you listen to Amazon's numbers, the company came out of the 2011 holiday season with a huge wad of cash in its pocket thanks to the Kindle Fire, Kindle Touch and the original Kindle e-book reader. Between the three, there's a flavor for every consumer ranging from the basic colorless electronic reader to the full-blown tablet experience (if you nuke the bookshelf loader, that is). But there may be more than what Amazon is letting on.

Digitimes Research claims that global shipments of e-book readers including the Kindle and Kindle Touch are only expected to reach 2 million units by the end of March. To be honest, this shouldn't be surprising given that consumers did most of their shopping in 4Q11 -- a lack in sales in 1Q12 shouldn't be any big surprise. Thing is, the number of units sold in 4Q11 was 9 million, meaning the number of units shipped will have dropped a fat 7 million by the end of March.

What's to blame for the drop? Amazon's Kindle Fire. For $199, it's a great deal, and that's no sales pitch. Consumers get a tablet that plays HD games from Gameloft, streams movies and TV shows from Amazon Instant Video, surfs the Flash-laden internet, plays music, becomes a portable office, and even allows owners to read books. The OS just keeps getting better with every update, putting previous complaints about sluggish touch screen controls and other launch problems in the past.

That said, consumers may simply see the $100 "upgrade" from Kindle Touch ($99) to Kindle Fire ($199) a great value, taking the plunge. Why not get a gadget that's not only backlit, but plays movies and Words With Friends too? Still, has Amazon shot itself in the foot in the process? Unnamed sources claim the launch of its Kindle Fire has resulted in a "substitution effect" for the other Kindle e-book readers since the beginning of 2012, thus forcing Amazon to reduce its orders from upstream suppliers for those two non-tablet models.

But there doesn't seem to be an end in sight for the e-book reader form factor despite the 1Q12 drop. Global shipments have amounted to 22.82 million units in 2011, a 107-percent increase from 2010, and annual shipments are expected to reach an impressive 60 million units by 2015. But there's also a good chance the e-book reader will be no more by then, giving way to a new form factor that provides similar Kindle Fire services but at the sub-$80 Kindle price.

There are 20 Comments.
Top Comments
  • 22
    santfu , March 6, 2012 10:15 PM
    There will be a market for e-ink for a good while yet. Battery life as well as eye strain.
  • 22
    fyend , March 6, 2012 10:08 PM
    I prefer e-ink readers for reading books to a tablet screen. Much easier on the eyes IMO. However it appears that I'm in the minority.
  • 10
    ubercake , March 6, 2012 10:28 PM
    The target market may have become saturated with these devices. Amazon isn't using an iPod or iPad model of product lifecycle by which your device is obsolete two years later.

    Kindles continue to work and provide the same level of service years later.

    I am a huge fan of e-ink. If you read a lot, there's nothing easier on the eyes.
Other Comments
  • 22
    fyend , March 6, 2012 10:08 PM
    I prefer e-ink readers for reading books to a tablet screen. Much easier on the eyes IMO. However it appears that I'm in the minority.
  • 22
    santfu , March 6, 2012 10:15 PM
    There will be a market for e-ink for a good while yet. Battery life as well as eye strain.
  • 6
    southernshark , March 6, 2012 10:18 PM
    Na, I've got both and never use the Fire for E-reading. It just isn't as fun or pleasant to read with. I can see a short term dip in e-reader sales though as people try out the Fire, but I think that most real "readers" will get the e-reader. When we get color e-readers at a decent price the demand for the e-reader will be even stronger.
  • 8
    13thmonkey , March 6, 2012 10:18 PM
    nope not in the minority, suspect that there were a large number of early adopter that have adopted, slower from now on.
  • 10
    ubercake , March 6, 2012 10:28 PM
    The target market may have become saturated with these devices. Amazon isn't using an iPod or iPad model of product lifecycle by which your device is obsolete two years later.

    Kindles continue to work and provide the same level of service years later.

    I am a huge fan of e-ink. If you read a lot, there's nothing easier on the eyes.
  • 7
    ubercake , March 6, 2012 10:34 PM
    ...In addition, we're dealing with a decent-quality product that lasts a while like 'back in the old days'. When the market became saturated with a product back then, manufacturers were forced to come up with new and innovative products rather than think of ways they could make the old high-quality products stop working or become obsolete (again... iPod, iPhone, iPad).
  • 7
    anonymous@guest , March 6, 2012 10:48 PM
    Try reading with a Kindle Fire at the beach, at full sunlight, or with any other tablet. Next to impossible. In that situation an e-ink reader works flawlessly and the reading experience is similar to that of a conventional paper book.
  • 2
    CaedenV , March 6, 2012 11:01 PM
    lamorpaPeople don't actually read...

    LOL

    I'm going to copy what others here say; nobody uses the fire as a reader, they use it as a cheap tablet. My wife has a kindle and my co-worker has a fire, and there is simply no comparing the 2 products. My wife recharges her kindle every month or 2 (unless she forgets to turn off the wifi lol), while my coworker recharges every single day, and sometimes twice a day if she uses it a lot. the Kindle is very easy to read, while the fire is a piece of junk for text clarity (I think my crappy phone is clearer on text!). 2 very different products, for 2 very different markets.

    I think the biggest thing to note here is how few people buy these devices for themselves. Most of them are bought as gifts, and so I think a great many people who would have ordered a regular kindle for themselves are getting the fire because the person buying it does not know what they are getting and simply thinks that color is better.
  • 2
    anonymous@guest , March 6, 2012 11:17 PM
    @svilla

    as much as i like e-ink i need a device that can do better than 10fps screen updates (and no im not playing FPS or anything) and i have no intention of dragging around two devices. It is possible to read on a LCD, it's called white on black and works surprisingly well, it's no where near as nice as e-ink but far from painful
  • 0
    gokanis , March 6, 2012 11:23 PM
    I still have my old RCA REB 1100 book reader (only 11 hours on a charge with the backlight), its fat and bulky but not too heavy, kinda like holding a paperback. Works great. Only thing I am missing is wifi and true USB mounting capability. I am looking at a kindle ereader vs the fire as I have no interest in another gaming and video device. I read about three books a week. Of course ME3 will cut into that time for a few days.
  • 0
    gm0n3y , March 7, 2012 1:16 AM
    I'm still using a first gen Kobo e-ink reader. I know quite a few people with tablets but I don't know of any that uses it for more than very light reading. Everyone I know that is a heavy reader uses an e-reader or just reads paper books.
  • 0
    JeBuSBrian , March 7, 2012 3:37 AM
    When a company makes a table with both e-ink and traditional lcd, I'll be more interested.
  • 1
    imi2003 , March 7, 2012 4:18 AM
    When deciding between a normal e-ink kindle and the kindle fire for my daughter, angry birds and a usable color internet browser made my decision.
    I went for the normal e-ink kindle, i rather my kids read a proper book than waste their time on facebook and playing angry birds.
    I bet most of these kindle fire's will turn in to angry bird pads for kids, instead of being used for their intended use, to read books.
  • 1
    anonymous@guest , March 7, 2012 8:08 AM
    I love my eInk Kindle, but I've spent more of my time reading on the Fire because it's convenient to also be able to do other things. And yes, I'm reading whole books. I've even been using Kindle on my phone more than my eInk lately. Sad that it is gathering dust! But should it break, I would still buy an eInk device to compliment my tablet
  • 0
    dalauder , March 7, 2012 11:36 AM
    ubercake...In addition, we're dealing with a decent-quality product that lasts a while like 'back in the old days'. When the market became saturated with a product back then, manufacturers were forced to come up with new and innovative products rather than think of ways they could make the old high-quality products stop working or become obsolete (again... iPod, iPhone, iPad).
    I'm a bit confused as to how these devices keep becoming obsolete. Aside from gaining non-proprietary ports, I've never had a need for an MP3 player better than the original iPod (and never had one that good).

    And I've never had a phone better than the original iPhone. What makes the new ones THAT much better to where the previous version is automatically obsolete.

    Wow! Americans have ridiculously large disposable incomes.
  • 0
    dalauder , March 7, 2012 11:53 AM
    gokanisI still have my old RCA REB 1100 book reader (only 11 hours on a charge with the backlight), its fat and bulky...I read about three books a week.
    You've gotta get an e-ink Kindle...'nuff said.
  • 0
    tbq , March 7, 2012 12:41 PM
    I have both Fire and Keyboard models. Their uses don't overlap much. The e-ink screen is far better for reading a book, while the tablet is better for browsing YouTube or reading short articles.
  • 0
    lamorpa , March 7, 2012 7:17 PM
    tbqI have both Fire and Keyboard models. Their uses don't overlap much. The e-ink screen is far better for reading a book, while the tablet is better for browsing YouTube or reading short articles.

    How is the tablet better for reading short stories?
  • 0
    eddieroolz , March 7, 2012 9:35 PM
    If I was purely reading, I'd still prefer an e-Ink screen.
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