The second version of Amazon's (AMZN) remarkably successful digital book reader, the Kindle 2, begins shipping to eager readers this week, amid a controversy within the audio book industry about its new Text-to-Speech capability. How will readers react the the new, improved electronic device?

The first version sold very well, although even the best estimates vary widely. A director at Citigroup Smith Barney who specializes in internet business recently estimated that around half a million of the readers were sold in 2008. This seems reasonable in light of Sony's claim to have sold 300,000 of its more expensive but similar Portable Readers over the past three years, without the reach of Amazon's marketing or 230,000-title catalog.

The new generation Kindle is similar to its predecessor, with incremental improvements in size, screen resolution, and battery life. Some annoying button locations and functions have been cleaned up, as well. Among the features that appeal to many are the ability to clip text and upload it to the reader's PC, annotate text while reading, download content wirelessly via its Whispernet (using Sprint's cellular network), and listen to MP3 music. The reader also accepts files in formats other than its native .AZW, although some, such as Word files, have to be sent to Amazon for conversion.

The most controversial aspect of the Kindle 2 is the new Text-to-Speech function, which reads text aloud in what users describe as dramatically improved, even nuanced synthetic speech. The Author's Guild claims that this is a copyright violation, since authors receive additional money for audio versions of their work. (I recently received a nice check for the audio version of my short story "Call Me Mr. Positive" in the "Orson Scott Card's Intergalactic Medicine Show" anthology.)

To see the reason for this dispute, look at Amazon's prices for the new Stephenie Meyer bestseller, "Breaking Dawn." The Kindle version sells for $11.38, while the audiobook version costs $37.80, a 330% difference. Amazon pays authors 35% of the list price for Kindle books, so this difference represents a hefty chunk of change.

Time will tell if the Kindle will become the iPod of the book world, but sales already far exceed the expectations of many pundits (including me). As the new version lands in the hands of the literate, the transition from paper to electrons may be accelerated.

Read more about the Kindle and electronic publishing

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