A Seattle newspaper confirmed late last week that Amazon.com is in the late stages of rolling out two new versions of Kindle. Reports unconfirmed by Amazon indicate there will be at least two new devices -- one with a new user interface but the same dimensions of the original paperback-sized reader, and another the size of an 8-by-11-inch sheet of paper. Other tantalizing details are that the new readers may sport color choices.

The original Kindle has been criticized for its bland appearance and somewhat clunky controls, so color and a new interface could help sales. Not that Amazon seems to be complaining. Low estimates of current Kindle sales are pegged at around 230,000 units shipped in nine months, while others speculate that more than 380,00 have been sold.

According to Mark Mahaney, a financial analyst at Citigroup, "Although (Amazon) has not disclosed Kindle sales, our collection of data points leads us to double our '08 unit assumption from 190,000 to 380,000. In its first year, that's exactly how many iPods were sold. Turns out the Kindle is becoming the iPod of the book world."

The $5.5 billion textbook market is prime turf for the Kindle and Amazon. While e-book readers have made no significant dent in the market yet, a number of factors may push things along.

The chief complaint among students is textbook prices. Electronic versions can drive down both the production and distribution costs.

Another problem is weight. Students are lugging tens of pounds of books to and from classes.

Add to the mix that the Kindle has a built-in MP3 player and wireless 3G connectivity, and there may be much more under the hood than boring history books. While McGraw-Hill estimates that 90 percent of its textbooks are available in e-book format, other publishers may be well behind that figure.

What's Driving e-Book Sales

One of the factors driving the market is innovative screen technology from companies such as Cambridge, MA-based E-Ink, which licenses its E-Ink 'paper' screens to a number of vendors, including Amazon, Sony and Blackberry.

Current e-book readers can be difficult to read and practically useless in some situations. The latest screens are not backlit, and therefore are highly readable in a variety of settings, including full sunlight.

Amazon began the Kindle rollout with 90,000 titles available for instant download via the Sprint 3G network. Estimates of titles available now are at 140,000.

Sony, another big player in the e-book market, uses the same screen as the Kindle in its 505 model eReader. Larger form-factor E-Ink screens are in the Readius and the iRex iLiad, which runs a Linux-based operating system.

Pricing for the new Kindles is uncertain. The original debuted at $399 and was discounted to $349 midyear.

Mahaney said, "Based on our product review of Kindle (surprisingly good despite several V1 flaws), our tracking of its sales success to date (material according to our monitoring of customer reviews on Amazon's Web site), and our analysis of potential adoption-curve paths (by comparing the iPod's initial years ramp), we believe the Kindle could generate between $400 million and $750 million in revenue for (Amazon) by 2010 -- or one to three percent of its revenue."