The newer is $130, just ten bucks cheaper than a comparable Kindle or Nook. Amazon's next Kindle should break the $100 barrier, an appealing price point that would attract more mainstream users to the platform. It's the : Give 'em the hardware at cost, and make money on the content (ebooks, in this case).

3) Combo LCD/E-Ink display: The best of both worlds: A color LCD for Web browsing, gaming, Android apps, and other tablet-like activities; and a black-and-white E-Ink display for reading e-books in sunlight. A recent says Apple may be working on exactly this type of hybrid display technology. Perhaps Amazon could beat Steve Jobs to market.

4) Better controls:   Amazon is going to have to ditch the Kindle's physical keyboard, which makes the e-reader look clunky and outdated, despite its advantages for serious note-takers. The latest Kobo and Nook readers have touchscreen keyboards.

5) Generous lending policies: The arrives later this year. It will allow customers to borrow Kindle books from more than 11,000 U.S. libraries.

Amazon has yet to announce many specifics of the service, however. What advantages could the Lending Library provide that would give Amazon an advantage?