With the holiday shopping season about to “officially” kick off – and strong competition looming from both Sony and Barnes & Noble, Amazon has announced some drastic improvements for the Kindle.

The online retailer says it has found a way to increase battery life by 85 percent. This is for both new and existing models (a firmware update is available now). With this, you’ll be able to leave your Kindle on for seven full days (with WiFi activated) before you’ll need to recharge.

All Kindles will also now be able to read Adobe PDF files natively (as opposed to the conversion process they currently undergo). And users will be able to manually control screen rotation – a small, but very welcome change. Full details about the upgrade are available from Amazon.

The Kindle has a big leadership position in the eReader space, but it will face its biggest competition in the coming months. The category is expected to continue growing at a fast pace next year as prices start to fall. Barring something unforeseen, analysts say, eReaders will be the ‘must have’ gift of holiday 2010. 

Back in July, Amazon was starting to look like the gang who couldn’t shoot straight.

Kindle customers who had bought a copy of “1984” found the book deleted from their machine with no explanation. While it was later learned the publisher who uploaded the book did not have the appropriate rights, it set a scary precedent – that the company could ‘unsell’ something that you had legally bought.

Now Amazon is realizing what a colossal screw-up it made, calling it “stupid” and “thoughtless”. Better late than never, I suppose.

People affected by the action will receive a copy of “1984” for the Kindle (along with any annotations they made) or a $30 check or credit for Amazon products.

Gizmodo has the complete text of the note the company sent affected customers:

Hello,
On July 23, 2009, Jeff Bezos, our Founder and CEO, made the following apology to our customers:
“This is an apology for the way we previously handled illegally sold copies of 1984 and other novels on Kindle. Our “solution” to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we’ve received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.

Forget Amazon’s  Kindle or the Sony Reader. While manufacturers jockey for position, the real winner in this battle is going to be E Ink.

Market researcher DisplaySearch predicts sales of e-paper will skyrocket from $431 million this year to $9.6 billion by 2018. That’s chiefly because the vast majority of eReaders on the market use the same underlying technology – an electrophoretic display developed by E Ink that simulates the printed page.

There are roughly 20 eReaders on the market these days and the number is increasing. IREX announced earlier this week that it would launch an 8.1-inch eReader that would tie into Barnes & Noble’s catalog, making it one of the largest potential threats to the Kindle.

DisplaySearch expects 22 million eReaders to sell this year, but predicts that number will jump to 1.8 billion within 9 years.

As I mentioned in my review of the Kindle last month, it's a decent machine that does a good job of simulating the book experience, but the price is much, much too high still. Sony and IREX are leading the charge to make competing products, but so far consumers are more curious about the tech than eager to begin using it.

If e-paper sales are going to reach that level, the price either needs to start falling fast or manufacturers of eReaders are going to have to finding ways to supplement their offerings. 

Looks like Amazon might be starting to take those criticisms about the Kindle’s price to heart.

The Register has unearthed a patent application by the online retail giant that describes adding contextual ads to Kindle content. Banners would sit atop and beside the content.

The ads wouldn’t be forced upon customers. The patent applications describe this to be a request-based program.

Interestingly, a second application by Amazon details ads in printed books, specifically those that are manufactured ‘on-demand’. (This would likely be out-of-print titles and specialty books.)

It’s possible that Amazon plans to leave Kindle hardware prices alone and is simply looking for a way to further reduce the price of content – or to enable ads for its magazine clients. (Admittedly, the filings tend to support this theory.)

Of course, another possibility would be buyers of a reduced price Kindle (say, something in the $100 or lower range) would opt-in for ads in every book, magazine or newspaper they purchase. It might seem a tough sell, but is it really that much different than any internet page you look at today?

While the Kindle DX touts a number of new features, it really all boils down to one thing: The screen.

With a reading area that measures some 9.7 inches diagonally, the latest in Amazon.com’s line of e-book readers is targeted at the company’s most voracious customers. But the larger screen (which is roughly 62 percent bigger than that of the Kindle 2’s reading area) comes at a cost – both literal and figurative.

Let’s get the literal out of the way first. The DX is expensive: $489 to be precise. (A protective cover will run you an extra $50.) That’s a $130 premium over the Kindle 2. And the price pushes the DX far out of the reach of the typical Amazon customer.

That’s a shame, because the DX rights several shortcomings of previous Kindles. The larger screen lets you see more text at once – which makes it feel more like you’re reading a book – and works better with newspaper and magazine content than the 6-inch screen on the Kindle 2.

It also has a bigger memory (with the ability to store up to 3,500 books, magazines or newspapers).

The ability to store and display PDF files is a handy one, but it’s here that the Kindle DX begins to stumble. The inability to zoom in on a document is a bit frustrating. And Amazon charges 45 cents for you to email yourself a PDF. It’s pocket change, but it feels a bit like gouging after paying so much for the device.

(Sure, you can dock your Kindle to your PC and manually transfer PDF files, but it’s a hassle – and doesn’t mesh well with the Kindle’s ‘go anywhere’ vibe.)

One of the major factors holding back the downloadable movie market has been price. With a minimum $9.99 price, often higher, for most films, it's at best competitive with and often pricier than DVDs. Doesn't make much sense given that digital downloads are much cheaper to distribute and the rights are more restrictive.

The reason, of course, is that studios don't want to upset their existing, slowly dying but still multi-billion dollar DVD business. Pricing downloads lower than DVDs would piss off major retailers like Wal-Mart and Best Buy. So most movies on iTunes and other digital stores cost the same as DVDs and the market remains tiny.

The New York Times and Washington Post, both of which trumpeted a partnership with Amazon for its new big screen Kindle DX today, are following the same strategy, according to the press release:

So yeah, it's an innovative new business model! But only in locations where it doesn't threaten the slowly decaying old business model.