According to quoted supply chain sources, Digitimes reports that orders for Amazon’s Kindle Fire will be slashed by up to half in the wake of a looming iPad 3 launch.

Amazon have yet to release official numbers, but have touted the Kindle Fire as their “most successful product ever.” It is estimated that 6 million units were reportedly during the holiday quarter 2011, with this latest report pointing to a total shipping volume reduction of 50% in just one quarter.

The numbers show that the build-up in iPad 3 rumors and anticipation of an early 2012 launch for Apple’s next-generation tablet are hurting the Kindle Fire, whose entry-level $199 price point made it the 2nd most successful tablet of 2011 – after the iPad 2.

The iPad 3 has been rumored to feature a high-definition “retina” display, quad-core processor, upgraded front and rear cameras, LTE technology and a launch-date in February or March of this year.