Will Kindle Fire Extinguish the Original Kindle E-Reader?

Amazon’s (NASDAQ:AMZN) Kindle Fire surprised many analysts with its holiday popularity. While Anthony DiClemente, an analyst at Barclays, originally estimated holiday sales of 2 million, he has steadily increased his prediction which now sits at 5.5 million. Heather Bellini at Goldman Sachs has set the bar even higher with an estimate of 6 million. But what effect will booming sales of the Fire have on the original Kindle?

David Streitfeld at Yahoo! (NASDAQ:YHOO) Finance wrote, “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.” While sales estimates for the Fire continue to grow, sales estimates for e-readers continue to shrink. Goldman Sachs has reduced its global e-reader forecast for 2012 from 42 million to 34 million with Kindles specifically falling from 35 million to 25 million.

Streitfeld assumes that few people would purchase an e-reader when they could pay just a little more and have access to videos, games and the Internet. “Amazon never publishes the actual sales numbers of any device, so the speculation and revisions will continue. Some clues should be apparent, however, when the company releases its quarterly financial report at the end of the month,”  write Streitfeld.

Here’s how Amazon.com and some of its tablet competitors are reacting to the news today:

Amazon.com Inc. (NASDAQ:AMZN): AMZN shares recently traded at $179.10, down $0.24, or 0.13%. They have traded in a 52-week range of $160.59 to $246.71. Volume today was 73,423 shares versus a 3-month average volume of 6,507,370 shares. The company’s trailing P/E is 94.41, while trailing earnings are $1.90 per share.

Apple Inc. (NASDAQ:AAPL): AAPL shares recently traded at $421.23, down $2.01, or 0.47%. They have traded in a 52-week range of $310.50 to $427.75. Volume today was 383,858 shares versus a 3-month average volume of 14,590,000 shares. The company’s trailing P/E is 15.22, while trailing earnings are $27.68 per share.

Research In Motion Limited (NASDAQ:RIMM): RIMM shares recently traded at $15.35, down $0.16, or 1.03%. They have traded in a 52-week range of $12.45 to $70.54. Volume today was 237,092 shares versus a 3-month average volume of 21,620,700 shares. The company’s trailing P/E is 3.61, while trailing earnings are $4.25 per share.

Google Inc. (NASDAQ:GOOG): GOOG shares recently traded at $625.09, up $1.95, or 0.31%. They have traded in a 52-week range of $473.02 to $670.25. Volume today was 92,185 shares versus a 3-month average volume of 3,071,880 shares. The company’s trailing P/E is 21.31, while trailing earnings are $29.34 per share.

International Business Machines Corp. (NYSE:IBM): IBM shares recently traded at $181.19, down $0.12, or 0.07%. They have traded in a 52-week range of $147.67 to $194.90. Volume today was 136,695 shares versus a 3-month average volume of 5,251,220 shares. The company’s trailing P/E is 14.28, while trailing earnings are $12.69 per share.

Barnes & Noble, Inc. (NYSE:BKS): BKS shares recently traded at $11.63, down $0.07, or 0.6%. They have traded in a 52-week range of $9.35 to $18.73. Volume today was 8,428 shares versus a 3-month average volume of 1,682,110 shares. The company’s trailing earnings are $-1.14 per share.

To contact the reporter on this story: Ashley Cloninger at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com