The hand-held Kindle downloads books, from a catalog of some 230,000 titles, as well as newspaper stories, blog posts and other reading material over a wireless network. The Kindle 2 is thinner than the original device, has an added joystick, more battery life and a function that reads books aloud.
The blogosphere was abuzz for months in anticipation of the new version of the device, with experts predicting that Amazon would fix some issues with the original design that garnered criticism. Indeed, it appears that the chances of accidental page turning is more difficult on the new Kindle, and highlighting and note taking will be easier.
Amazon also said that in the future, e-books will be available to read on other mobile devices, presumably iPhones or laptops.
But even with the improved functionality and increased capabilities, experts caution it will be hard for Amazon to break out in an ever-growing list of hand-held gadgets.
"For it to become a runway success would take some kind of dramatic innovation that I haven't seen yet," Wired.com's senior editor Dylan Tweney said last week.
"It would have to be a device that was not just a book reader but kind of a portable information device, and it might be something like a notebook computer except without a keyboard, some kind of elegant interface that lets you browse through news, check your e-mail, read a book, but also see what's happening, maybe watch videos, and sort of get all the world's information funneled into this one screen that's very easy to carry around. I don't see anybody doing that in a way that I think is really compelling yet," he said.
Tweney added it will be hard for true e-book innovation to come out of an organization like Amazon, saying the company doesn't have much of an incentive to open Kindle to more kinds of content.
"If they open up the format so that anyone can put any kind of book on the Kindle, then that means they no longer have exclusive access to selling people the books that they put on their Kindle," he said. "So I might buy a Kindle, then I might load it up with a bunch of free e-books that I downloaded off the Web, or a bunch of PDFs that I already have on my computer and Amazon would never get another dime, and they're not really in the business to sell Kindles, they're in the business to sell books."
Instead, there is some speculation that Apple may pick up where Amazon leaves off by creating a device that merges an electronic book reader with the options available on an iPhone.
The trick to pulling that off may be in emerging "e-ink" technology, which creates the illusion of electronic paper and makes for an easier reading experience in many different types of light. Before e-ink, the electronic reader was somewhat of an elusive dream for the "geeks in Silicon valley," Tweney said.
Until the perfect gadget comes along, an array of companies are vying to please booklovers on the go. Google announced last week that its public domain library of 1.5 million titles would be available on the iPhone or Android phone.
Amazon clearly expects to expand its catalog of book titles as well. In promotional materials for the new Kindle, the company says its "vision is to have every book ever printed, in any language, all available in under 60 seconds on Kindle."
Even with these major companies jockeying for a role in the future of books, some technology gurus wonder if they are battling for a small market that may only be getting smaller. Mark Glaser, executive editor of PBS MediaShift, said the digital generation that grew up reading on computers may have to emerge as a pivotal consumer group -- and get a little older -- before electronic readership really takes off.
"You can make a really nice-looking device, but I think it's kind of a societal thing, where you just have to have people really ready to do it," said Glaser, who adds that the e-reader market is "a hard nut to crack" because reading a printed book is such an ingrained habit.
Listen to MediaShift's Mark Glaser discuss the Kindle:
Add to that the barrage of information the digital consumers are getting all the time and some wonder if reading "Anna Karenina" or "War and Peace" can compete with constant updates from social networking sites like Facebook and video crazes on YouTube.
"I don't think Americans are particularly dedicated readers on the whole, so the overall market is probably not that great," Tweney said.
"If you're not an avid reader, you're going to say, 'OK, my laptop is good enough, or a printed book that I pick up in the store on a whim is good enough,'" he said.
Despite the competition -- and a hefty price tag at $359 -- the current incarnation of the Kindle has a core group of devout fans. Joe Wikert, general manager at O'Reilly Media, Inc., publishes Kindleville.com, a blog about the device. Wikert points out that the Kindle has sold out during holiday seasons, its sales largely driven by word of mouth.
Jacquelyn Pilch, a Washington, D.C., resident, said she begs her book club every month to choose books available on Kindle.
She bought a Kindle when she was living in Ghana and was "desperate for access to a wider selection of books that couldn't be found on the streets of Accra."
She has not looked back to paperbacks and hardbacks. "Holding and schlepping an actual book just feels like so much work, and I've come to terms with the bygone era of bookshelves as a source of personal aggrandizement," Pilch said.
Pilch also envisions a nobler use of the Kindle for educational purposes. "What if every child in a developing country had a Kindle? Or even every child in inner city or Appalachia America, where there are often not enough textbooks to go around?" she said. "Children (and adults) everywhere could have equal access to mobile libraries of information. This would revolutionize learning across the world, and I think that is a beautiful possibility."
Education is an obvious market, the tech experts agree. There is a clear advantage to carrying a lightweight reading device as opposed to a backpack full of 10- or 20-pound textbooks. "It would be easy to make an economic case for that to most students and it would probably still be a profitable," Tweney said. "To hit that market they would probably need a bigger screen, they might need a color screen and they might need the support of academic textbook publishers."