Even though ereader sales are down, Amazon is continuing to improve the Kindle.
The company on Tuesday announced an updated version of the Kindle Paperwhite, its flagship ereader, which was first released last year.
Aside from a brighter screen with higher contrast, most of the changes are to the guts and the operating system of the device -- a 25 percent faster processor, touch technology that promises to be more responsive, and new features that aim to enhance reading on a Paperwhite.
But the upgraded Paperwhite comes at a time when sales of tablets -- from companies like Apple, Samsung, Asus and Amazon itself -- have eaten into sales of ereaders. Sales of Kindle ereaders -- which make up almost half of ereader sales worldwide -- peaked in 2011 and are expected to continue to decline over the next five years, according to IDC. The technology research firm predicts a drop in all ereader sales from a peak of 26.4 million worldwide in 2011 to 11.7 million in 2017.
Last year, sales of Amazon's Kindle Fire, a tablet with a color LCD display, surpassed sales of its ereaders. Still, Amazon has revamped its bestselling ereader and kept the price for the Wi-Fi version at $119.
Perhaps most useful, and what makes reading on a Kindle more like reading an actual paper book, is the new Kindle Page Flip feature. Kindle Page Flip allows you to look at other pages, like a glossary or a map, without losing the page you're reading. Think of it as the 21st century version of using your finger as a placeholder. A swipe from the bottom of the screen brings up a scrubber that allows you to scroll through other chapters or pages. A preview window appears over the current page you're reading. To actually go to another page, simply tap the preview. You can also see bookmarked pages within a preview window.
Amazon has added similar functionality with footnotes, so that the text of a footnote appears in a box on the page you're reading.
Another update aims to help readers build their vocabulary. For some time, you've been able to look up the definitions of words you don't know. Now, each time you look up a word, that word is collected in the Vocabulary Builder, a section of the Kindle Paperwhite that can later quiz you with flashcards.
Later this year, the new Paperwhite will receive a software update that will integrate Kindle FreeTime, Amazon's parental control feature now available on the Kindle Fire family of tablets. FreeTime will allow parents not only to choose which books are available for their kids to read, but to keep track of how much their kids are reading.
A later update will also integrate Goodreads, the social network for book lovers that Amazon bought earlier this year, into the Kindle, allowing people to see book recommendations and what their friends are reading.
The new features are for now available only on the upgraded Paperwhite, which became available for presale on Tuesday and will ship on Sept. 30. Amazon hasn't said whether the software updates will come to older Kindles.
Tom Mainelli, a research director at IDC, said that Amazon didn't correctly predict how quickly tablets would cut into ereader sales. Amazon's strategy with the upgraded Paperwhite, he said, is to focus on improving the Kindle experience for "a small, voracious reader group" who still prefer an ereader to a full-fledged tablet with an LCD display.
"It also happens that they're the ones that buy the most books," Mainelli said.
Amazon has made no secret that it sells Kindles at cost, making money when people pay to download books on their ereaders as well as movies, music, TV shows and magazines on their tablets.
Amazon also on Tuesday announced MatchBook, a program that will allow customers who've purchased a physical book from Amazon, any time in the history of Amazon, to download a heavily discounted -- or even free -- ebook version. The program will begin next month, and it's dependent on the participation of publishers. So far, HarperCollins is the only big name publisher on board, but Amazon expects to add more before the program begins.
Between MatchBook and the improved footnote functionality on the Paperwhite, maybe you'll finally get around to reading that copy of Infinite Jest that's been sitting on your bookshelf for years.
Mainelli said he doesn't see Amazon discontinuing its line of ereaders any time soon.
"There's definitely a place for these devices in the world today," said Mainelli. "I just think it's a smaller percentage of the average consumer who's going to want one."