As expected, (NASDAQ:AMZN) introduced its new Kindle DX this morning. It's larger than the existing e-book reader, with a screen 2.5 times bigger than the current model offers, yet it's still only a third of an inch thick.

The screen isn't the only thing that's bigger. The price tag is growing to $489. That's $130 more than the regular device.

Even though consumers generally expect gadget prices to shrink over time, there are a few reasons to bet on the success of the newest device from the world's largest online retailer.

  • Kindle DX will be tested at five colleges, where physical textbooks are very expensive.
  • A few newspaper companies, including New York Times (NYSE:NYT) and Washington Post (NYSE:WPO), will offer discounted DX readers in exchange for long-term digital subscriptions from those who live outside the markets where daily physical delivery is possible.
  • Among the DX's new features are the ability to read documents in Adobe's (NASDAQ:ADBE) PDF format and a beefier storage capacity. Taking a page out of Apple's (NASDAQ:AAPL) iPhone, the device's display will also auto-rotate -- it will switch from portrait to landscape mode if it senses that the Kindle has been flipped to its side. 

Once again, Amazon is raising the bar that the likes of Sony (NYSE:SNE) and Barnes & Noble (NYSE:BKS) will be pressed to compete against. Sony has been in the market longer and Barnes & Noble has the killer bookstore brand, but neither of those companies will get a gush-fest on Oprah Winfrey's show.

So keep rocking, Amazon, even if the critics initially scoff at the hefty price tag. (Fellow Fool Tim Beyers is one of those critics. Check out what he had to say about the Kindle DX.)

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