February 9, 2009 11:04 AM PST

What's new about the Kindle 2? Not a whole lot

Amazon CEO Jeff Bezos holds up the Kindle 2 Monday in New York.

(Credit: David Carnoy/CBS Interactive)

NEW YORK--Were there an anthology of gadget launch announcements, the unveiling of Amazon's Kindle 2 e-book reader would have one of the more anticlimactic storylines.

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It started out like any other big press conference, with a line of reporters and photographers streaming out the door onto the chilly sidewalk outside the historic Morgan Library & Museum.

The Kindle 2's arrival had been preceded by the usual blog blitz of leaked photos, rumors, and breathless wish lists. (A color screen! Better PDF support! International versions of the Kindle store!) Amazon CEO Jeff Bezos took the stage, Steve Jobs-style, with a slide show recap of the original Kindle's success before making the big debut.

But the announcement itself was underwhelming. The price, $359, remains the same. The battery life's been improved by about 25 percent. The Kindle 2 is much skinnier than its predecessor, slimming down to 0.36 inches in thickness from 0.7, but it's only a tenth of an ounce lighter. The storage capacity has jumped from 256MB to 2GB, or about 200 to 1,500 books, and the electronic ink display has improved from a 4-shade to 16-shade grayscale.

The layout of some of the buttons has been restructured, and the new Kindle also has a text-to-speech reader. In short, the improvements seem worthwhile, but there was no real curveball to give the Kindle a mainstream appeal.

"Nice enhancements, but is it going to fundamentally change the value proposition of the Kindle? No," said Van Baker, an analyst at research firm Gartner.

"The Kindle has enjoyed very strong response from the mobile professional segment, the people who spend a lot of time on airplanes, who like to be reading multiple business books at the same time and maybe a copy of The New York Times and those kinds of things while they're traveling, and for that segment of the population it's a wonderful product," Baker continued. "For the average consumer who gets up in the morning, goes to a job, comes home at night, watches the evening news, there's no value proposition for the Kindle with or without these enhancements."

Bezos' sales pitch for the Kindle 2 is that it's a necessity in a chaotic, information-clogged world, and that it's time for the physical book to take its most radical new form since the days of the printing press. "Long-form reading is losing ground to short-form reading," he said with a sense of urgency, adding that "we learn different things from long-form than short-form reading. Some things can only be taught or understood in hundreds of pages."

He had additional marketing help from legendary novelist Stephen King, who came onstage to make the announcement that a new novella, Ur, would be sold exclusively on the Kindle. It is, in fact, a story about a one-of-a-kind pink Kindle with magical powers. That is not a joke.

"We've been selling e-books for years, and guess what? It didn't work, until 14 months ago," Bezos said, alluding to the original Kindle's launch in November 2007. The device has been a more-than-modest hit, with sales possibly hovering around 500,000 and still on backorder. There are now more than 230,000 book titles available for it, up from 90,000 at its original launch. The new one starts shipping on February 24.

The potential market? "Not that big"
Gartner's Van Baker said that the problem with the Kindle is not that it's defective, it's that e-book readers simply will not be mainstream devices any time soon. "The Kindle is far and away the best executed version of the e-book reader in the marketplace so far," he said. "They've got the biggest library, they've got wireless delivery, it's a very well-done product, and for those (demographic) segments that value the ability to carry multiple books and readers easily, it's a wonderful product. It's just that segment of the population is not that big."

There are a few promising signs of more to come with the Kindle. One of them is "Whispersync," a new feature in the Whispernet technology that provides the Kindle's free Internet connectivity. With Whispersync, one Kindle can automatically sync with another; that's not particularly earth-shattering right now unless you use two Kindles or want to transfer content from an older model, but Amazon has said that it "will also sync with a range of mobile devices in the future." A Kindle app for the iPhone, perhaps? Now that could be quite a plot twist.

In this economy, an easy way to push a geek toy into the mainstream is to slash the price or offer a lower-end version, and $359 is no bargain. But Van Baker said that while a hefty price cut could generate some buzz, it couldn't turn a niche gadget into a mega-hit.

"If the price is that, it's a hard sell for anybody outside the mobile professional ranks," he said, "but if they cut it by 50 bucks, would it make that much difference? No, it wouldn't."

Even the celebrity power of Stephen King wouldn't help much, he added. With regard to a Kindle-exclusive novella that stars a fantastical version of the gadget, he said, "It's pretty gimmicky."

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Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos. E-mail Caroline.