The last page for the paperback?

It was a milestone the book industry had expected to reach eventually, but few had thought it would occur so soon.

But only three years after Amazon launched its Kindle electronic reading device, the online giant has revealed it was "now selling more Kindle books than paper books".

Alongside a 36 per cent rise in fourth-quarter global sales, Amazon said that since the beginning of 2010 it had sold 115 Kindle e-books for every 100 paperback book sales on its US site. Equally impressively, the online specialist said it had sold "three times as many" Kindle books as hardcover ones. This calculation excludes free e-books, which, if accounted for, would have made the shift more stunning.

Jeff Bezos, the founder and chief executive of Amazon, said it had sold millions of latest, third-generation Kindles. He said: "Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected."

Of course, these milestones only relate to the US and Amazon only accounts for a relatively small portion – albeit a fast-growing one – of the total book market over the pond. But on this side of the Atlantic, Amazon's UK site has also enjoyed soaring Kindle sales since it first became available through pre-order in July.

Amazon UK currently sells more than 500,000 e-books on its site, in addition to more than 1 million titles for free. Christopher North, the managing director of Amazon UK, said: "Of all the millions of things we sell in the UK, it [the Kindle device] was our best-selling product for Christmas and all of 2010." Even the panel of judges for the Man Booker Prize, who are normally weighed down by 100-plus print editions to wade through, are being issued with e-readers this year.

However, Amazon is not the only player in the e-book revolution that looks set to transform the book market. The e-reader market is also populated by devices from Sony and Samsung, as well as the US book chain Barnes & Noble's Nook product. But tablet computers, such as the Apple iPad and Samsung's Galaxy device, are likely to account for a greater proportion of e-book consumption over the next few years.

Furthermore, concerns are already being raised about the impact on the industry of e-books. In addition to the threat of book piracy, e-books not only threaten high street book retailers but also the overall business model for print books, which are far more expensive to produce, print and ship. On the subject of piracy, Dan Cryan, a senior analyst for digital media at Screen Digest, says: "I think this is the beginning of major book piracy. For the first time, we are in a position where major book piracy can become rife."

However, while the long-term impact of e-books for the sector is still unclear, it is likely to have a grim impact on physical booksellers. The fact Amazon UK retails its best-selling e-book, The Basement by Stephen Leather, for only 71p, cannot be a good omen for shops.

Furthermore, the number of sites, such as Gutenberg and Bartleby, which legitimately offer some e-books free, is only likely to grow. This is in addition to the free e-books provided by Amazon and Apple for its iPhone and iPad. But one positive benefit of e-books for publishers and authors is that consumers cannot hand over recommended books to friends or family members.

It also appears publishers are keeping their fingers crossed that e-books can offset some of the decline in physical book sales. Neill Denny, the editor-in-chief of The Bookseller, the trade bible, says: "Print books were down nearly 3 per cent in the UK last year but half of that will have been taken up by e-books." He adds: "Publishers seem pretty pleased with the response to e-books so far, although it depends on the deals they strike with the likes of Amazon. The margins on e-books are pretty good. The long-term worry is that print books become uneconomical."

Whichever way e-books develop, Amazon wants to be at the lead. Mr North does not hide its ambitions. "Our vision is that every book, in every language can be downloadable in 60 seconds [on the Kindle]."

More specifically, Amazon has been clever at ensuring Kindle e-books can be read on other devices, such as Apple's iPhone and Google's Android phones. Mr North said: "We really see it is a very complementary product to tablet computers and smart phones."

In fact, more British people are likely to be reading e-books on tablet computers over the coming years than on Kindle or other e-readers. Screen Digest estimates that Amazon's Kindle accounted for about 70 per cent of the 1.3 million specialist e-readers sold in the UK last year, but forecasts this figure will rise to only 1.8 million in 2014. In contrast, it expects sales of tablet computers to soar from 1.4 million in 2010 to 4.1 million over the same period. In the wake of this proliferation of devices, Mr Cryan's concern is that book piracy will start to head in the same direction as it did with music, after the launch a myriad of MP3 devices. "If I was a publisher at this point, I would be quite worried," says Mr Cryan.

Mr Denny has similar concerns. He says: "Publishers are worried about print books, particularly cannibalisation of print book sales and piracy, although both have not happened yet."

Furthermore, experts have wider concerns about the ramifications of the seemingly inexorable shift of books on to the internet. Mr Denny says: "Publishers need print books to validate e-books and make them discoverable. It is harder to do this online. Print book shops are where people find out about books and if e-books lead to their decline then this will be harder. People only tend to go online for books they want to buy."

While no one knows how the e-book revolution will end, it is likely to have a happier ending for Amazon than much of the book industry.

Top 5 Kindle Sellers

1. The Basement

Stephen Leather

2. The Girl with the Dragon Tattoo

Stieg Larsson

3. Hard Landing

Stephen Leather

4. The Girl Who Kicked the Hornets' Nest

Stieg Larsson

5. The Hanging Shed

Gordon Ferris