Amazon launches larger-screen Kindle

By Robert MacMillan and Alexandria Sage

NEW YORK/SAN FRANCISCO (Reuters) - Amazon.com Inc introduced a larger, souped-up Kindle electronic reader on Wednesday designed for students and newspaper readers, but a $489 (384 pound) price tag could make it too expensive for many consumers.

The Kindle DX, which has a 9.7 inch black-and-white display, is designed to be a more friendly vehicle for textbooks and newspapers, which often need a larger space to display their content effectively. The DX has about 2.5 times the surface area of the normal Kindle and costs $130 more.

Despite the popularity and buzz surrounding the Kindle brand, the DX faces challenges, analysts say. It debuts at a time when consumer spending is ebbing due to the recession.

And while it has a less-cluttered layout than the average computer screen and is easier on the eyes than a monitor, the DX provides little of the interactivity that people get on other hand-held devices. It does not offer colour or touch-screen.

Super-sizing the Kindle also appears to ignore consumers' fascination with pocket-size gadgets such as Apple Inc's iPod and iPhone.

"It seems like you're fighting the impulse among consumers to go to smaller, more portable ways of acquiring media, such as an iPhone or a netbook," said Alan Mutter, a technology venture capitalist and former newspaper editor who runs the newspaper business blog Reflections of a Newsosaur.

PILOT PROGRAMS

The new Kindle comes as other companies including Sony Corp experiment with digital readers as ways to get people to use -- and pay for -- traditional media, even as they spend more time online and less time on the printed page.

Amazon CEO Jeff Bezos said The New York Times, The Washington Post and The Boston Globe will start pilot programs with the DX this summer. He said five universities will do pilot programs with the reader acting as an all-in-one textbook.

The DX also allows people to read personal documents, and is touted as a way for businesspeople and others to avoid having to carry around an assortment of loose papers.

Besides making highly formatted pages easier to read, the DX has more memory, 3.3 gigabytes, which can hold up to 3,500 books versus the normal Kindle's 1,500.

But at $489, analysts questioned how many economy-conscious consumers would open their wallets for the new gadget, which weighs nearly 19 ounces.

"It is somewhat ironic in that the device is getting more expensive as the source content that is well-suited to it is becoming more mass-market such as newspapers and textbooks," said Ross Rubin, consumer technology analyst at the NPD Group.

Amazon is quick to tout its Kindle as the future of reading -- and a sales driver for the Seattle-based giant -- but does not disclose its sales and profit breakdown, leading some analysts to view the Kindle as an interesting niche device with minor mainstream appeal.

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