All of this success has a hidden cost: Sales growth of the Kindle e-reader devices, which are cheaper than the Fire but have more limited functions, is likely to diminish. In the first nine months of 2011, when the Fire was only a rumor, Amazon shipped an estimated 10.6 million e-readers, more than triple the number it shipped during the comparable months of 2010.
But now you can pay just a little more to be able to watch video and play games as well as read text. With the Fire soaring, Goldman Sachs is dropping its global e-reader shipment forecast for 2012 to 34 million units from 42 million. And since the Kindles are the dominant player in the e-reader market, their estimates are being cut back as well, to 25 million from 35 million.