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The world's largest Internet retailer, Amazon.com, Inc. (AMZN - Analyst Report), recently announced a new version of the Kindle Paperwhite with hardware improvements and new features designed for book lovers. This is a modified version of Paperwhite which was introduced last year.

The new Kindle Paperwhite is Amazon’s sixth generation e-book reader. The device has a great battery, a 25% faster processor, latest touch technology, an improved page-turning experience and an X-Ray feature, which provides useful insight about books.

On the hardware front, the device is very light and thin, weighing just 206 grams. The higher contrast ratio makes Paperwhite a visual treat for readers and the front-lit screen allows readers to scan books even in the dark. On the connectivity front, the new e-book reader supports both WiFi and 3G. Additionally, Amazon plans to integrate Goodreads into Kindle e-reading software, helping its readers to freely search and share books of their choice.

With a price range of $119 to $189, Kindle Paperwhite is already available for pre-order. Amazon expects the shipments to start by the end of this month.

Amazon’s constant upgrading of its e-book reader is surely benefiting customers. However, while Amazon may have the best e-reader, Apple (AAPL - Analyst Report) certainly has the best tablet. Despite the fact that the Kindle has acquired many new features over the years, it is not a full-blown tablet yet. Therefore, given that the tablet market is far larger than the e-reader market, Amazon’s Kindle is unlikely to catch up with Apple’s iPad any time soon. Additionally, the market continues to heat up with other tablets such as Microsoft’s (MSFT - Analyst Report) Surface and Google’s Nexus.

According to a report by PwC (PricewaterhouseCoopers), the trade e-books (excluding educational publications) will reach $8.2 billion in sales by 2017 in the U.S. alone. The e-book market has witnessed an unprecedented growth, as both authors and readers have benefited from it. Amazon, through its Kindle reader and Kindle apps, is currently the leading seller of e-books. However, if the company is unable to build further on its Kindle or slash prices drastically, it could see its share of overall book spending decline.

Though Amazon remains one of the leading players in the fast-growing e-commerce market, it reported a loss of 1 cent in the second quarter and missed the Zacks Consensus Estimate by 5 cents. Also, revenues of $15.70 billion were down 2.3% sequentially but up 22.4% from the year-ago quarter.

The company is making huge investments in fulfillment and technology & content, which might continue to impact the company’s bottom line, going forward.

Currently, Amazon’s shares hold a Zacks Rank #3 (Hold).

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