Amazon.com founder Jeff Bezos displayed the Kindle 2 at a recent New York press conference. The Platform Jacket for Kindle 2 introduces a new bookstand design that lets users read their Kindles upright and hands-free, while still offering full protection in a lushly-padded case.

The device has a 6-inch, 600 x 800 pixel display that provides 16 shades of gray, an upgrade from its predecessor that only displayed four. The company claims that pages refresh 20 percent faster in the new version of the device, and the Kindle 2 is available for preorder and costs about $360.

Though Amazon has not yet released data on sales of the Kindle, analysts already believe the device is turning modest profits. On Feb. 2, Citigroup analyst Mark Mahaney projected the company sold 500,000 Kindles in 2008, based on the number of device activations disclosed by Sprint, its wireless service provider. That would bring revenue from Kindle to around $153 million. That's less than 1% of Amazon's $19.2 billion total sales, but enough to make the product line profitable, analysts say.

Amazon Kindle devices use "Whispernet" distribution technology that utilizes Sprint's 3G network with no recurring fee to users. Whispernet will track information, such as the page a user is reading, so that it can be accessed between multiple devices. Although details are scare, it is thought that the same features would be available to mobile users.

Amazon won't say how many Kindles it has sold, but analysts estimate the figure at about 500,000. Its main competition comes from Sony Corp., which has sold more than 300,000 of its Reader Digital Book devices.