After lots of rumors and much speculation, Amazon has finally taken the wraps off the newest iteration of the Kindle, which we will colloquially call the Kindle 3. Styled in strikingly similar fashion to the new Kindle DX that Amazon only started selling this month, the Kindle 3 seems to represent the next logical step in the eReader niche. For Amazon, it’s an extraordinarily important step to re-securing their foothold in the face of an increasingly competitive market.

The Kindle 3’s list of features hits all the major selling points for eReader aficionados. It is 21 percent smaller in terms of surface area and 15 percent lighter, while retaining the same six-inch screen that Kindle 2 owners have come to know and love. Screen contrast has been improved by 50 percent, meaning that books should pop off the page a little more. The page-turn speed, which already compared favorably with Barnes & Noble’s Nook, has been improved by 20 percent. This increased screen refresh rate should also make the web browser and menu navigation that much better. They’ve also gone ahead and doubled the on-board storage from 2GB to 4, so you can now hold up to 3,500 books.

While all these changes have made an unquestionable improvement on the Kindle 2 experience, there are still a couple things missing. The absence of an SD card slot for expanding the on-board memory is a little baffling, though perhaps it would have gone against the general trend for slimming down the size. Amazon reported that their color e-Ink technology wasn’t far enough along to release at mass-market prices just yet, so readers will have to settle for black and white for the time being. Other than that though, there really isn’t a lot to complain about.

The biggest coup with the Kindle 3 announcement by far, however, was the price point. While the Kindle 3 will essentially replace the Kindle 2 at $189 with free 3G wireless internet service, Amazon has also introduced a new Kindle Wi-Fi model for just $139, undercutting the Wi-Fi version of Barnes & Noble’s Nook by $10 with newer hardware to boot. While the 3G service can definitely be handy in certain situations, it is by no means necessary for 99% of potential Kindle owners, and I’d expect the Wi-Fi model to quickly become the standard. They’re also offering both models in traditional Kindle white or the sexier new graphite finish, giving customers a little more choice.

While many in the media heralded the imminent death of the Kindle when Apple announced its iPad, it’s clear that the Kindle is here to stay. The iPad with its iBookstore makes for a passable eReader, based on my own experiences, but it’s no substitute for a dedicated device. With lawyers lining up to fire a class-action lawsuit at Apple because iPads overheat and shut down in direct sunlight, there is as yet a niche for Amazon to peddle their wares, even if it’s only beside the pool and at the beach.

With this new model and subsequent price drop, Amazon is finally starting to tickle the itchy impulse buy trigger-fingers of mainstream consumers. The traditional bargain point for impulse purchase electronics is at $99, but with they’ve gotten close enough with sexy enough hardware that it might just push many people over the edge. If you’re one of those considering jumping on-board, we heartily recommend it.

Kindle 3G (Free 3G + Wi-Fi, 6″)
Kindle (Wi-Fi, 6″)

At eReaderChat.com, we’re obviously big believers in the future of eBooks. While a few mainstream media outlets here and there share our vision of a paperless future, I think the consensus amongst the general public is still that eBooks and eReaders will continue to represent merely a small chunk of the larger book retailer pie. I’m here to tell you that this is not the case.

In a statement released by Amazon Founder and CEO Jeff Bezos, Amazon revealed that for the first time, sales of books in the Kindle format have exceeded those sold in the hardcover format. According to the metrics they released, for every 100 hardcover books Amazon has sold, they have sold 143 Kindle books. In just the last month, since they slashed the price of the Kindle 2 to $189, that ratio has gone up to 180 Kindle books for every 100 hardcover books sold.

“We’ve reached a tipping point with the new price of Kindle–the growth rate of Kindle device unit sales has tripled since we lowered the price from $259 to $189,” said Jeff Bezos, Founder and CEO of Amazon.com. “In addition, even while our hardcover sales continue to grow, the Kindle format has now overtaken the hardcover format. Amazon.com customers now purchase more Kindle books than hardcover books–astonishing when you consider that we’ve been selling hardcover books for 15 years, and Kindle books for 33 months.”

Of course, as with any corporate announcement of this sort, which is generally made for the benefit of the company’s share price, you have to take it with a grain of salt. Amazon very deliberately did not release any specific numbers about either their hardcover sales or their Kindle book sales. They stuck mostly to vague ratios, such as noting that three times as many Kindle books were sold in the first half of 2010 as compared to the same period in 2009.

What’s more, comparing overall Kindle book sales to hardcover sales is a little disingenuous. After all, the category “Kindle Books” encompasses more than two million titles in all, and includes nearly all the paperback titles you’re liable to find gracing the shelves of your local book retailer. Hardcover books, by contrast, usually only run for the first year of the life of a book, and are much more expensive than the $9.99 one expects to spend for a Kindle book.

Having made my semantic point, this is obviously still tremendous news for Amazon. With the Kindle 2 finally starting to reach a price point where it can enjoy mainstream success, and their Kindle App present on just about every mobile device under the sun, including Apple’s iPad, it’s clear that the future of eBooks for Amazon is quite bright.

Father’s Day is right on our doorstep and for many, that means a mad scramble to find gifts for Dad. Finding gifts for the old man can be difficult, because after a couple years, he’s probably got more neckties and grill covers than he’ll ever need in an entire lifetime. If your father happens to be a Kindle owner though, you might be in luck. We’ve taken a look at four accessories that could be game-changers for that erstwhile Kindle owner in your life.

M-Edge Guardian Case
Price: $79.99
Rating: 4.5/5 stars

Pros:

• Takes your Kindle underwater
• Only case of its kind
• Heavy-duty construction

Cons

• On the expensive side
• Heavier than most cases
• No access to power button

The newest case from the folks at m-Edge does something that no other Kindle case on the market can boast – it both floats on water and keeps your Kindle bone dry even after being submerged completely in water. I know what you’re thinking: as cool as it would be to be able to bring your Kindle with you on that inflatable raft in the middle of your pool, is it really worth potentially sacrificing your $259 piece of consumer electronics just for the novelty?

That’s where I come in. I’ve spent about a week with the m-Edge Guardian, giving it the full run-around in my community pool. As nervous as I was about submerging the Kindle the first time, I’m not entirely sure how I ever lived without it just a week later. It sports heavy-duty construction that keeps out water up to a depth of a meter, and contains special air reservoirs that allow it to float. Reading in the pool is pretty much as relaxing as things get, and since the Kindle is basically the king of reading devices, it’s a match made in heaven for the aquatic-oriented Dad.

It might not look like it, but you can actually navigate using all the normal buttons. There is softer plastic over those parts of the case. The only button you can’t access is the power button, so you’ll have to make sure not to get too relaxed out by the pool and let the thing go idle, because you’ll have to crack it open to turn it on again. My only other real complaints with the case are that it’s heavy and on the expensive side. Realistically though, both of those sins are forgivable, since you need top-quality construction if you’re going to go submersing electronics in water. If you’ve got a father in your life who loves to read and loves to swim, this is the perfect novelty.

OCTOVO Solis Reading Light
Price: $29.99
Rating: 5/5 stars

Pros

• Compact size makes for easy traveling
• Effortless, button-less design
• Naturally tilted at an angle to reduce glare

Cons

• Doesn’t match the Kindle motif
• On the expensive side for a light

One of the necessary concessions that Amazon had to make in creating the Kindle’s e-Ink screen was in the area of backlighting. In order to give that full paper-like experience without having to worry about eye fatigue and battery life, the Kindle is often at the mercy of the ambient light you have around you. I’ve tried a number of Kindle book lights in my day, but the long-term problem I’ve had with many of them is that they add needlessly to the bulk when carrying around the Kindle.

Octovo has devised a rather brilliant solution to that with their Solis book light. Rather than attach the light to the case itself, the Solis clips on to the top of the Kindle (at an angle that prevents glare no less – they really though this through!), and you can turn it on simply by swinging the sleek aluminum arm out. The light is an LED, which means it’s fairly efficient in terms of battery life, gobbling up one AA battery in about 25 hours. It’s more expensive than most Kindle-centric reading lights, but it’s also probably the best I’ve tried so far.

OCTOVO Weave Leather Cover
Price: $74.99
Rating: 4/5 stars

Pros

• Features Amazon’s Kindle hinge system
• Really trendy-looking woven leather design
• Has that wonderful leather smell

Cons

• Way more expensive than comparable cases

When buying a third party Kindle cover, one of the unfortunate side effects is that most of them don’t make use of Amazon’s hinge mechanism. While all the covers I’ve trade to date have done a good job substituting for this with straps that hold the Kindle in by its corners, sometimes it feels like something’s missing with that hinge mechanism of the original case not being used.

The OCTOVO Weave Leather Cover is the first third-party case I’ve tried that actually utilizes Amazon’s hinge system. Like the official case from Amazon, it securely locks in your Kindle using the proprietary locking mechanism on the left side of your Kindle. It also appears to have the same microfiber interior that prevents scratching. Where it differs from the official cover is the outside. The woven leather exterior completely blows the official Kindle cover away in terms of a classy finish, as it well should for double the price of the official cover.

m-Edge Latitude Jacket
Price: $34.99
Rating: 4/5 stars

Pros

• Light-weight design
• Trendy camouflage pattern
• Zippers for full enclosure and protection

Cons

• Microfiber interior seems to attract dirt

The m-Edge latitude jacket is pretty straight forward as far as Kindle cases go. It is light-weight, sports a zipper for complete protection, comes in trendy camo colors, and even features an exterior zipper pocket so you can bring your charger cable along with you. While the Latitude is a solid case for your dollar, that’s not why I wanted to mention it.

The camo Latitude jacket is the flagship product to help promote the E-Books for Troops non-profit. This organization has undertaken the noble task of raising money to purchase eReaders for the servicemen and women risking their lives overseas. Whatever your feelings on the wars in which the military is engaged today, it’s hard to imagine a better way to contribute to their continued comfort and sanity than near-unlimited access to books, newspapers, and magazines via eReaders. Compared to hauling books around, a Kindle takes up almost no space.

M-Edge has promised to donate a Latitude Jacket and e-Luminator2 booklight for every Kindle purchased by E-Books for the Troops, but it’s up to us as eReader fanatics to donate the money that will put these eReaders in their hands. So maybe after purchasing dad’s Father’s Day gift, consider donating some money to E-Books for the Troops in his name. It’s a great cause.

With the overnight success of Apple’s iPad, which endears itself to customers largely with its bright, colorful display and intuitive touch interface, there’s been a certain expectation that Amazon’s next entry into the eReader marketplace would be a direct feature-for-feature challenger. According to a recent report by Bloomberg, however, that may not be the case.

Citing sources with an intimate connection to the project, Bloomberg claims that Amazon’s next version of the Kindle will not be an iPad-killing touch-based tablet per the expectations, but a more incremental upgrade on the already-existing Kindle line. It will sport a more responsive screen with a sharper picture, and will be even thinner than the Kindle 2’s already trim 0.36 inches. So think Kindle 3 instead of the Kindle Touch.

If the Kindle Touch isn’t almost on our doorstep as we had hoped, then what was Amazon intended purchasing a touch-screen company a few months ago? That was the source of many of our raised expectations for the next Kindle device. At the recent shareholders meeting, Amazon CEO Jeff Bezos said of the in-progress color screen, “I’ve seen some stuff in the laboratory, but it’s not quite ready for prime-time production.” OK…

It pleases me that Amazon isn’t immediately abandoning its legitimate eReaders in the rush to put out a full-fledged multimedia device, but I’m not sure I understand their intentions. Has anybody ever really looked at a Kindle 2 and decided not to purchase the thing because it’s too fat at a third of an inch thick? Even somebody with severe body image issues would have to concede that it is pretty skinny. And has anybody ever bought a paperback over an eBook because the images you almost never see when reading are less than crisp than ideal? I shouldn’t think so. Faster page turn speed is nice, but is that supposed to move the thing by itself?

This is going to be a public relations headache for Amazon, who is already portrayed in the mainstream media as the eBook company stuck behind the times due to the fact that the Kindle doesn’t have all the bells and whistles needed to convince non-readers to buy the device. If they just push another version of the Kindle without acknowledging the change in the marketplace, they’re going to look out of touch (pun not intended).

This is not to say that this Kindle 3 could not be successful. The Kindle 3 could be their first low-cost entrant into the market, made thinner by removing the 3G technology whose cost is largely responsible for the device still retailing for a couple hundred dollars. Or slightly more practically, they could position the Kindle 3 as their flagship eReader product for the rest of the year while keeping the Kindle 2 available to consumers at a heavily-discounted price. I still think the market for a cheaper eReader remains largely untapped.

We’ll find out soon enough.

Amazon recently announced that they will be releasing a version 2.5 software update for the Kindle and Kindle DX at the end of May. This update adds a few interesting enhancements to your eReader:

Twitter and Facebook Posts – This feature gives you the ability to share passages you’re reading on Facebook and Twitter from your Kindle.

Popular Highlights – See what other Kindle users think are the best passages from the books you’re reading.

Collections – Organization for your books and documents.

Larger and Sharper – The addition of two new larger fonts and overall sharpening on all fonts.

Password Protection – Add password protection to your Kindle while it’s not in use to keep others from getting access to your books.

PDF Pan and Zoom – Zoom and pan around PDFs to view smaller print or detailed graphics.

It’s hard to ignore that Amazon is trying their best to provide more interaction with the content on your Kindle and make it more online-friendly. Give them credit for trying to keep up with the competition.

Amazon has had to face the music with the competition coming from Apple’s iPad. The Wallstreet Journal reports that Amazon has given in to the pressure from some book publishers to price their books outside of the $9.99 price point that Amazon has been fighting for. Now, Simon & Schuster, HarperCollins, and Macmillan will have more control over the pricing of their ebooks through the Kindle store.

Thanks to an “agency pricing model”, most new best sellers will be going for $12.99 and $14.99. There will still be some books available for $9.99 (and maybe even lower); but as we all know, the books we want to read will all be the pricier ones.

It seems to me that competition should be lowering prices, not raising them. One of the big benefits of forking out the cash for a Kindle was that you’d have access to cheaper reading material than buying a physical copy. I have made some impulse purchases on the Kindle just because I knew the cost was $10 or less. I’ve purchased books from new authors and new genres just because I considered it a bargain price. Sure, it’s only an extra 3 to 5 bucks, but now I will be more likely to double- or triple- think the purchase.

I’m sure this is a decision that Amazon has been strong-armed into by the greedy book-publishing powers that be; having Kindle ebooks priced lower than the competition would definitely be their preference, but by refusing to align with the agency pricing model they would be missing a lot of content that is available on the Nook, iPad, etc.

Even if you’re as dubious as I am about the new Apple iPad competing seriously with the Kindle for the e-Reader spotlight, there’s little questioning that their share of the market stands to fall off a bit in the coming months and years. The sheer number of new devices available now is bound to dilute their dominance, especially when people start trying to make the apples to oranges comparison of a catch-all tablet PC with a dedicated e-Reader.

Amazon is a big company full of smart folks though, so they’re not going to take this lying down. Probably the most obvious response is the “If you can’t beat em, join em” tactic. The rumors of a new Kindle Touch seem to imply that they’re steering in that direction, at least in part. Releasing a new, premium Kindle with a bunch of fancy bells and whistles just makes sense. After all, it was our No. 1 Kindle prediction for 2010.

There is another angle to it that hasn’t been explored, and that’s offering a lower-budget version of the Kindle to get people hooked on buying eBooks. According to reports by TechCrunch, however, Amazon is prepared to take it even farther than that. Apparently, long-time Amazon customers and bibliophiles started getting promotional emails back in January, just before Apple’s big flop of an event, offering them a money-back guarantee for those who ordered a new Kindle 2 and didn’t like it. If they purchased the device and reported that they weren’t satisfied, Amazon was prepared to let them keep the Kindle for free.

While it seemed like a good one-off deal at the time meant to sway people who might be intrigued by the iPad, TechCrunch is now citing a source that says free Kindles could be the way of the future. The report says that they’re trying to find a way to cut costs to the point where they can offer a free Kindle to every Amazon Prime subscriber.

For those not in the know, Amazon Prime is a subscription service offered by Amazon where you pay a yearly fee of $79 and in exchange get free two-day shipping for the whole year as well as overnight shipping for the heavily-discounted price of $3.99. It’s a brilliant sell, because once you have that free two-day shipping going, it becomes difficult to buy products online anywhere else. Consequently, Amazon Prime subscribers become some of their most loyal customers. Give these people a few Kindles, the thinking goes, and they’re bound to happily spend away, more than making up for the cost of the device in word-of-mouth advertising and the sheer volume of books purchased.

Of course, this all hinges on Amazon being able to reduce their costs to the point where they’re not taking huge losses by giving Kindles away. I suspect, and this is purely conjecture at this point, that this is going to come to fruition at the same time as the launch of the rumored Kindle Touch. Amazon can start handing out the Kindle 2 for free to Amazon Prime subscribers and avoid cannibalizing their own market share by releasing a fancier touch-enabled Kindle to fill its place in the premium-priced niche. Everybody wins, from the budget-conscious to the gadget freaks.

The question remains: should you hold off buying a Kindle now so you can get in on this sweet deal? I don’t think we’re quite at that point yet. This is still all shrouded in rumor, and the earliest something like this is liable to happen is the holiday season at the end of the year. The degree to which the Kindle can improve your reading habits today more than justifies the cost. And would you really deny yourself that satisfaction? I wouldn’t either.

Learn more about Amazon Prime »

Despite the fact that Apple’s iPad has been met with near-universal criticism since it was announced at the end of January, it would seem that Apple has still managed to at least change the dialogue in the e-Reader sphere and cast doubt on the viability of Amazon’s current stable of readers. The iPad might not be able to multitask, or display flash, or have any use at all out in the sun, but it’s raised the expectations amongst those who would prefer to see e-Readers move to full-color touch screen displays.

The prospect of an Amazon e-Reader with such a display is actually much closer than I think many of us were led to believe. The New York Times recently reported that Amazon has acquired a small New York-based startup by the name of Touchco, whose specialty it seems is developing touch screens that are significantly cheaper than the ones used by Apple. No sooner was the company purchased than they were rolled into Amazon’s Kindle division and disappeared from sight.

Interestingly, Prime View International (PVI), which currently produces the Kindle displays, has come out and said that they too will be releasing technology for a color multi-touch display this year that will feature support for animation. It’s unclear at this point whether Amazon intends to implement ideas from both companies or whether PVI is going to get the boot in favor of Touchco.

It’s no secret that Amazon has been active about trying to figure out ways to eat Apple’s lunch. They’ve already enlisted developers to start coming up with games for their platform, which makes much more sense if they’re developing a color touchscreen display than with the Kindle’s currently unwieldy e-Ink technology. And we’ve been talking about the possibility of a Kindle App store since last December.

The problem as I see it is that Amazon can’t hit Apple where it hurts without compromising the integrity of their current e-Reader technology. Try going outside with your Kindle and an iPhone with the Kindle app and tell me which one is easier to read with all that ambient glare. The Times reporter was saying that Touchco’s technology is intended for use with LCD technology, but that’s not a direction Amazon can go without sacrificing both readability and battery life.

Of course, this is a distinction that so-called “experts” and industry analysts seem to miss in this equation. For somebody just looking at this scenario from the point of Amazon’s stock price, going after the same market as an industry-leader is the only aggressive move one can make. But as people who actually read books on our e-Readers, an increasingly novel concept, the future seems much murkier.

Color displays and touch screens could greatly improve the vibrance and intuitive user interface of the Kindle, but they’re just not necessary for reading. We can just hope that Amazon doesn’t lose sight of that in the coming months, and we’ll definitely be keeping an eye on any future mentions of a Kindle Touch.

It always used to baffle me when people would vehemently oppose the government’s ability to look up records of books you’d taken out at the local library. What could they possibly glean from such mundane information, I worried, and how could reading anything you find at your local library be used to implicate you? It’s not as though they have diagrams on how to build pipe bombs sitting right next to the children’s section, right?

As I’ve grown older, however, and our world has grown increasingly digital, I’ve started to notice the ways in which these minor infringements of our privacy can have detrimental side effects. As a general rule, I still don’t much worry about the government knowing that I’m actually reading indulgent fantasy novels, even though I tell everybody who asks that I’m working on Tolstoy. (If they were going to rat me out, I imagine they’d have done it by now.) No, my concern is more than that this information can find its way into the hands of advertisers, who, recognizing me as a member of that illustrious 18-35 middle class male demographic, will pursue me to the ends of the earth hawking products that I don’t need. In-Kindle ads sound far-fetched now, but there are some warning signs that it’s coming.

That’s why I was a bit distressed when a friend forwarded along a link to the E-Book Buyer’s Guide to Privacy by the Electronic Frontier Foundation. By combing through the privacy policies of the market’s major e-Readers, they’ve come up with a helpful side by side comparison for those of us nursing nascent tin foil hats. It’s worrying to note that, from a privacy perspective, Amazon fails on nearly every one of their criteria. Everything from the books you search for to the pages you viewed to how long you viewed them is recorded and attached to your Amazon profile, and are thus accessible to law enforcement, civil courts, and within Amazon itself. What’s worse, they don’t give you the option to opt out of these tracking systems or delete them from your profile. Once they’re there, you’re stuck.

Of course, any reasonable person has to acknowledge that most of this tracking is done in the name of consumer convenience, not the out-stretched arm of Big Brother. How else are you supposed to re-download titles you’ve bought unless Amazon keeps a record of them? And how else are they supposed to recommend you new titles without knowing which ones you’re currently engaged in?

And while people like me don’t have much concern for our privacy because we’re not subject to terribly much scrutiny, that doesn’t mean that there aren’t people who would rather remain anonymous for legitimate reasons. What if you’re a Chinese ex-pat concerned about whether your old government is tracking your dissident reading habits? Or a candidate for political office worried that reading socialist literature out of curiosity could cost her an election? These are valid concerns.

I think the middle ground for Amazon is aggregating this data in a way in which consumer privacy is preserved while also providing the necessary information for their algorithms in a quasi-anonymous way. Making explicit their commitment to preserving the privacy of their customers would also be a significant step. Amazon has already shown a willingness to push back against subpoenas, but you really have to dig to find this kind of information.

Of course, there’s always the option of just going to the old-fashioned book store and buying something in print with case. But where’s the fun in that?

What better time of year to address the state of the Kindle than in the wake of the President’s State of the Union address? Amazon recently announced their earnings report for the fourth quarter of 2009, and the results were overwhelmingly positive. Is that success sustainable?

According to their statements, fourth-quarter profits were up 71 percent over this period last year. While much of that growth comes as a result of Amazon’s aggressive retail practices, it’s hard to overlook the influence that the Kindle has had on their bottom line. They have reported six Kindle books sold for every 10 print books during that period, indicating that the content attach rate is starting to work its way up to a critical mass. What’s more, gadget blog TechCrunch is citing a source close to Amazon that pegs the current number of Kindle’s sold worldwide at 3 million, as of December. Not a bad number when you consider they were only expected to sell 2.5 million by the end of 2010!

But while the state of the Kindle is stronger than it has ever been, the announcement of Apple’s iPad on Wednesday is a reminder that the e-Reader market is a constantly changing beast, and the current state of affairs should not be taken for granted. Of course, this is not an Apple blog, so if you want a full rundown on all that the iPad has to offer, check out Gizmodo or any one of the myriad of sites that have full coverage.

The aspect of the iPad that does interest me is, of course, the iBooks application that represents Apple’s first foray into the word of eBooks. Their presentation was slick, as has become customary for Apple, but I’m as dubious about the prospect of reading books on the device as I was when it was still being referred to as the iSlate. Reading on a backlit device with extremely limited battery power and no defense against glare just does not sound like an attractive prospect to me, touch screen or no.

Whether the device is ideal for reading eBooks doesn’t seem to have fazed the publishers who have already signed on to publish books on the platform. Apple is much more flexible with their pricing structure, and early indications peg their normal price point between $12.99 and $14.99, a not insignificant jump up from Amazon’s $9.99 standard. We’ve reported in past months how unhappy publishers are with Amazon’s discount model, and it appears that Apple is positioning themselves as a competitive outlet for those frustrations. The New York Times is even reporting that Amazon has pulled all books by Macmillan, one of the publishers who have officially thrown their lot in with Apple, from their site over these pricing disputes. Could it be the beginning of a trend?

Strong consumer enthusiasm for the Kindle is going to be their biggest buffer against the impending iBooks threat. Even if they’re unhappy with their chunk of the profits, it’s going to be difficult for more publishers to turn their backs on 3 million dedicated literophiles who snap up books at a much greater rate than the general population. What’s more, an increase in competition historically has downward pressure on the price of goods, so I highly doubt Apple’s effort to assuage publishers is going to influence Amazon’s pricing structure in a significant way.

The state of the Kindle is strong. We can never be totally sure what the future holds (though we do have an idea), but it seems as good a time as any to be Kindle owner. Why not jump on the bandwagon?