Okay, I'm going to put out there right now that Kindle's newer bigger self is not going to work. I seem to be in the minority, so let me be clear about what I mean by that: It will not sell as well as the original-sized Kindle, and it is not the way of the future.
The ways in which it will be moderately successful are as follows: As an entrance into the Boomer market (i.e., people who find the iPhone and even the original Kindle too small). What's going to hold it back here somewhat is the price. For folks who are already slightly skeptical about digital, $500 is a pretty big chunk of change. It will also be somewhat useful for folks who depend a lot on graphics--students who use textbooks, professionals who use manuals. For everyone named above, it's an interim step backwards, opening up the market for more users to become comfortable with the technology that already exists.
It's also a threat to Apple, because it's an interim step in the direction of a new kind of laptop technology: something like this could be your new computer someday. Make it a touchscreen, with a touchscreen keyboard, and you could run a pretty full OS. Apple is already responding to this threat with their Mediapad. If the Kindle goes in this direction, that's the one way that this thing will become a big player.
But I'm not sure Amazon is going in that direction because they seem pretty set on thinking of this as a *reading* device. And that's the real problem. The media device of the future is going to have to be an all-in-one, like the iPhone is.
The all-in-one mindset is important for two reasons. First, portability: if the logic behind the Kindle is that you don't want to carry around multiple books, then you also don't want to carry around multiple devices, and you probably don't want to carry around a big one. Portability is a key factor in mobile devices, and this Kindle just ain't it. If you're in the general market (not Boomer, not infographics-focused) and you wanted a digital reading device badly enough to pay that much money for it, you would have tried out the original Kindle, and by now you'd be used to it, and so why ever would you get something bigger?
Second, because we always want more functionality, not less. Why would I want to carry around a huge slab of computer that can only do one thing, when I could carry around something that could also act as a GPS, as a phone, as a Red-Sox-game-score tracker? I already expect more of my mobile devices. I think this is really important: if Amazon is trying to present a disruptive innovation (something that does less but reaches a broader market), they've got their price wrong. And if they're just trying to present a new innovation, then they are just innovating by looking in the rear view mirror.
So fire away. Why am I wrong?