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The Amazon Kindle Wi-Fi e-book reader is shown in this undated publicity photo released to Reuters July 28, 2010.REUTERS/Handout/Reuters

Provided they haven't all dropped them by accident into a swimming pool, an estimated 12 million Americans will be returning from their summer holidays with e-readers tucked under their arms, rather than the usual suitcase full of dog-eared books. And Yankee Group estimates that by 2013, readers of digital books outside the US will account for three times that number.

The recent growth in e-readers has been phenomenal. In 2009, only 5 million readers were sold around the world in that year, according to iSupply data.

Better still, electronic reading is looking like it might even make the odd company some money. Last week, for example, Barnes & Noble's share price jumped 15 per cent in a day after it reported that first-quarter revenues from digital content, digital devices and everything else related to its e-book business rose 140 per cent versus a year ago. For the first time in ages, investors are seriously thinking that e-books might save the company.

Amazon is just as boastful. It is hard to believe that a shift to reading electronic ink can do much for a company which generates about $10-billion in sales per quarter, and Amazon famously refuses to break out numbers – always a bad sign. But even if it still loses money selling Kindles, it must be getting increasingly difficult to do so. In a rare nugget of disclosure in May, Amazon said it had already sold more Kindle books in the year to date than in the whole of 2010.

Still, anything sounding too good to be true usually is. For a start, as the devices themselves become commoditized, the trick moves to spreading as wide a range of content over the biggest audiences as possible. That explains the scramble for content and the hope that colour devices can attract magazines which demand better graphics. It also suggests that Google's rapidly growing library, including three million free titles, could quickly pose a threat to smaller players and perhaps even to Amazon with over 60 per cent share. Literature may end up a game between balance sheets.

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