It appeals to consumers whose priorities are convenience and portability, and follows the success of the Apple iPod, which lets users carry around their entire music collection in a compact package, reports Daily Mail.
Critics doubted the same could be done with a book, where many get enjoyment from leafing through the pages of treasured volumes. But now the device threatens to consign printed books to history.
The Kindle has proved a hit, becoming Amazon's best-selling product ever. Sony has also enjoyed success with a similar device, the eReader, and Apple's popular iPad offers electronic book applications and downloads.
The previous best-selling product on Amazon was JK Rowling's novel Harry Potter and The Deathly Hallows, released in July 2007.
The third-generation Kindle, which was launched five months ago and costs 149 pounds, can carry up to 3,500 books in a slim package that weighs just 247gm - less than one paperback.
Using the device's internet connection, via either wi-fi or the 3G mobile phone network, ebooks can be downloaded in just 60 seconds.
On Christmas Day, more people activated new Kindles, downloaded Kindle applications and bought ebooks than on any previous day.
But despite the soaring popularity of electronic book readers, opinion remains divided about whether ebooks will ever replace paper and ink volumes.
One of the criticisms of the gadgets has been the suggestion that the bright light of the screen can tire the eyes, making reading a chore.
But the Kindle incorporates technology called 'E Ink', which manufacturers claim reduces glare and reads like a printed document, even in bright sunlight.
Traditionalists have also made the point that a real book never runs out of battery.
Amazon says the Kindle 3 can run for up to one month on a single charge with the wireless internet connection turned off, and 10 days with the wireless on constantly.
For many, part of the fun of going on holiday is rifling through the books in the airport shops to find a trashy novel or murder mystery for the beach.
Kindle's answer to this is to allow downloads via wi-fi and the internet from some 100 countries and territories around the world, the Mail reports.
Amazon's online store sells digital versions of 500,000 books, including bestsellers and new releases, and a range of UK and international newspapers and magazines.
More than one million free books are also available. And the Kindle will even read text aloud to owners who get tired of flicking through the electronic pages.
Selling virtual books via the internet wipes out the costs associated with production, transport and dealing with waste copies.
In theory, this should mean the product that reaches the consumer via the Kindle should be much cheaper than the real version.
However, this is not always the case. The Kindle version of Stephen Fry's The Fry Chronicles is listed at 12.99 pounds on Amazon, while the same website prices the hardback at just 8.20 pounds. Similarly, Jilly Cooper's Jump is 5.98 pounds on Kindle, compared to 5.19 pounds in paperback.
The figures suggest the arrival of ebooks is a huge money-spinner for Amazon, the publishers and, potentially, the authors.
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