Kindle seen as transitional technology

SEATTLE, July 5 (UPI) -- The Amazon Kindle electronic book device is slowly gaining traction among book readers but still may be too expensive for a mainstream audience, analysts say.

The 10-ounce device, which can hold up to 200 e-books, could hit $2.5 billion in sales by 2012, with 40,000 units moving so far this year, Steve Weinstein, an analyst with Pacific Crest in Portland, Ore., told the San Francisco Chronicle Saturday.

Weinstein added that online retailer Amazon, of Seattle, could sell between 700,000 and 800,000 of the devices by the end of 2008. But, he said, "I don't expect it to have the same impact on the industry as the iPod had on the music industry."

One reason is that the Kindle, which originally sold for $399 and has since been reduced to $359, is still too expensive for mass acceptance and could represent a transitional step in a longer-term move toward electronic book distribution, analysts told the newspaper.

"We see (the Kindle) as an incremental change -- it's certainly a device that has energized the digitization of books," said Tim McCall, vice president of online sales at Penguin Group USA.