Allen Weiner, an analyst Gartner, said e-reader prices have dropped, helping spur e-book sales. Another factor in Amazon's increased e-book sales is a greater public understanding of the devices and how they function, he said.

Weiner estimated that e-books now account for less than 10% of all book sales in North America.

The biggest question remains as to how well e-readers, which are mostly black and white, will compete against media tablets, such as the and the Samsung Galaxy Tab, which have more functionality than e-readers but cost much more. The iPad starts at $499.

" readers like Kindle are really going to have to go well below $99" to compete with coming tablets running and other operating systems, Weiner said.

The second-generation iPad is expected to have an even clearer display technology, and is just getting started with its , announced in December. Google is expected to tie its EBookstore concept with new tablets running on the operating system that is maximized for tablets, such as the Motorola Xoom. Google's moves will apply more pressure on Amazon and Barnes & Noble, which sells the color Nook e-reader, Weiner said.