Did Amazon Nuke eReader Market with 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.

Kevin started taking PCs apart in the 90s when Quake was on the way and his PC lacked the required components. Since then, he’s loved all things PC-related and cool gadgets ranging from the New Nintendo 3DS to Android tablets. He is currently a contributor at Digital Trends, writing about everything from computers to how-to content on Windows and Macs to reviews of the latest laptops from HP, Dell, Lenovo, and more. 

  • fyend
    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.
  • santfu
    There will be a market for e-ink for a good while yet. Battery life as well as eye strain.
  • southernshark
    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.
  • 13thmonkey
    nope not in the minority, suspect that there were a large number of early adopter that have adopted, slower from now on.
  • ubercake
    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.
  • 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).
  • 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.
  • lamorpa
    People don't actually read...
  • CaedenV
    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.
  • @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