Trending: IBM sues Zillow, accuses the real estate giant of building key features using Big Blue’s tech

The attention-grabbing price of $199 for the new Kindle Fire will generate a huge amount of demand for Amazon’s tablet, boosting Amazon’s sales out of the gate. Nearly 55 percent of the more than 370 people who have voted in our GeekWire poll plan to buy a Kindle Fire, compared with 24 percent for iPad.

But with the expense of making the Kindle Fire reportedly well above the retail price of the device, all those sales will come at a cost to the Seattle company’s bottom line, at least in the short term.

That’s the assessment of financial analysts who cover the company, many of whom spent the day after the Kindle Fire announcement adjusting their revenue and earnings forecasts for Amazon’s current quarter and next year.

Here’s an excerpt from research note today by Dan Geiman, an analyst at McAdams Wright Ragen in Seattle.

We believe that 4Q11 Kindle Fire sales will total 3–4 million units, which would result in total sales of about $600–$800 million. Netting the likely cannibalization of the Kindle e-readers, we’re estimating a Q4 sales impact of around $500 million.

But the direct incremental costs are likely to be materially higher than the incremental sales, particularly in the near term. Production costs are reportedly in the $250 range per unit (or about $50 higher than the unit sale price). As well, we believe that the incremental marketing costs will be significant, particularly in the fourth quarter. As a result, our 4Q11 earnings estimate falls to $0.82 per share (from $0.93) on sales of $18.1 billion (versus our prior estimate of $17.6 billion). Our 2011 estimate, in turn, drops to $1.92 per share from $2.04.

Over time, another big question is how much of that cost Amazon can make up over time through increased sales of its other products and services, such as Amazon Prime subscriptions, e-books and television and movie downloads.

As Amazon CEO Jeff Bezos tells Bloomberg Businessweek’s Brad Stone in the magazine’s upcoming cover story, ”We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

Like what you're reading? Subscribe to GeekWire's free newsletters to catch every headline


Job Listings on GeekWork

Find more jobs on GeekWork. Employers, post a job here.