se a black-and-white display technology called electronic ink (also used by the Kindle). Sony is rolling out a new family of e-readers, including a pocket-size version and one with a large screen that's geared toward newspapers and magazines.

One reason e-readers are getting traction is that competition is driving down prices. Amazon has cut the price of the Kindle by $100 over the past six months, to $259. As e-readers proliferate and price disparities narrow, manufacturers are trying to differentiate their products by adding features such as MP3 players and touch screens. The eSlick by Foxit, based in Fremont, Calif., allows users to listen to songs while reading. Asustek recently unveiled a prototype e-reader with two screens, which would more closely duplicate the traditional reading experience, although the device that the company expects to release later this year will have a single screen.

 At the same time, new display technologies are emerging that promise to improve battery life and make devices more portable and easier to read. U.K.-based Plastic Logic hopes to introduce next year the first e-reader with a plastic screen that will reduce glare and be less prone to cracking when dropped by ham-fisted owners. Electronic-ink technology is set to move from black and white to color by the end of 2010. Even video is on the horizon. "We'll see a range of models start to appear over the first half of 2010" offering "a range of different reading and productivity experiences," says Neil Jones, CEO of U.K.-based Interead, which in May launched a $249 e-reader called the COOL-ER.

Newcomers will have a hard time breaking Amazon's chokehold in the U.S., where the company controls 60% of the e-reader market, according to Forrester Research. But the edge Amazon gained when it launched the Kindle could be blunted by evolving technology and changing consumer needs. Currently, more peop

le read e-books on their smart phones than they do on dedicated devices like e-readers.

And there's the looming threat posed by next-generation tablet computers. Apple, the king of cool handheld devices, is rumored to be readying a tablet computer with all the functions of a laptop as well as iPhone-like touch capabilities for release early next year. Microsoft has been secretive about its plans for a tablet, but a video making the rounds of the blogosphere show a dual-LCD-screen prototype that closes like a book. "E-readers are a transitional technology," says Rotman Epps of Forrester Research. Which means that just as the e-reader is taking off, it may be becoming obsolete.

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