47% bought one as a gift, that worries me. It's similar to my own anecdotal evidence from people I know who bought them: they have an iPad, but they bought their kid/niece/nephew a kindle fire.

It seems like a lot of these are going to families as a 'second tablet'.

How does this handle reading e-books?

The article lists that as one of its main uses in the real work, but it seems like it would be a dramatically worse experience than either paper or the e-Ink kindles that came before the fire.

This, IMO, is one of the real problems with both Amazon and B&N branding their LCD tablet devices under the same brand as their eInk ones.

People don't seem to "get" it. The Fire/Tablet is more expensive, and so, must be the "best". If all you want to do is read, the LCD devices are actually worse in both readability and battery life. But I don't see either manufacturer doing a great job at explaining that.

I think you have a great point. I have an older kindle (odd to say that about something I got less than 6 months ago...) that I think is fantastic as a dedicated reader. I would pay for the Fire swiftly, if it was a better reader, but the store models I have seen seem to be worse as dedicated readers.

Their hardware cost will also come down as they achieve increased economies of scale. Net net, the profitability of the Fire should increase over time.

So when users purchase a device designed to consume amazon services they consume more amazon services...

Yeah, nothing surprising here. By this logic, since most of the revenue comes from ebooks, they should have stuck to selling normal Kindles.

I suppose app and streaming video revenue will grow over time.

Half were gifts. This is a crossover device, at least in grandma's opinion, and she chose it over other pads. Even if its worse than a 'real Kindle', the point is the Fire got a sale that probably would have been lost to a nook etc.