Amazon.com Inc. unveiled a bigger, more costly version of its Kindle electronic reading device Wednesday, and the company will begin marketing the device as an alternative to textbooks for college students looking to save money.

The new Kindle has a larger screen and offers more data storage than its predecessor, giving users room for 3,500 books instead of the 1,500 that can be stored on the Kindle 2.

Amazon founder and Chief Executive Jeff Bezos said in an interview Wednesday that the new Kindle's 9.7-inch screen, when compared to the 6-inch screen on the regular Kindle, is better equipped for showing "complex layouts" for everything from cookbooks to travel guides.

"Things like those that have a lot of layout, structure, look really good on a big screen," Bezos said Wednesday at an event at Pace University in New York.

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The Kindle already had features like the ability to highlight and bookmark passages that could aid textbook reading. Users could tap the Kindle's keyboard to look up words and annotate text.

Since the Kindle's debut in 2007, it's been popular with users, but Amazon has not disclosed Kindle sales figures. The publishing industry has said e-books account for less than 1 percent of book sales.

The new Kindle sells for $489, and the smaller Kindle 2 for $359.

Using the new device Amazon will try to open more avenues for digital versions of books — and other kinds of content. The New York Times, The Boston Globe and The Washington Post plan pilot programs in which they will offer the new Kindle at a discount to some readers who sign up for subscriptions to read the news on the device.

Case Western President Barbara Snyder said her school will be looking to see whether the device changes how students take notes, study and communicate with each other and their professors. Using the Kindle DX "opens a new world of educational opportunity," she said.

For students, the biggest advantage could be the lower cost of electronic textbooks. Reading material on the Kindle is consistently less expensive than printed versions, with new releases of mass-market books typically costing $10, for example.

A 2005 Government Accountability Office report said the average cost is $900 per year for students at four-year public colleges, though the textbook industry argues the figure is closer to $625. Typically the prices are high because publishers are trying to capture as many sales as possible in the first year of release, before students can buy used versions.

Though Amazon currently sells physical textbooks, Bezos believes electronic versions will eventually dominate. "It just makes so much sense," he said.

Whether portable, electronic versions of newspapers make sense will remain to be seen. But publishers that have struggled to get people to pay for digital versions of news stories in Web browsers are exploring the Kindle and similar devices.

"Ultimately, this is about providing our readers with what they want and need," said New York Times Co. Chairman Arthur Sulzberger Jr., who joined Bezos on stage for the event.

When the Kindle 2 was unveiled, NPD Group analyst Ross Rubin predicted that for e-book readers to reach broader audiences, the price would have to come down — something he didn't expect to happen until must-haves like textbooks became available for the devices. Since the Kindle DX actually costs quite a bit more than the Kindle 2, "it makes sense to explore ... other forms of distribution, such as subsidization by newspapers," Rubin said.

Bezos said another potential improvement in the Kindle — a color screen — is being explored but "many years away from commercial readiness."

"The electronic paper display we're using now, that was in the lab for 13 years," he said.

Amazon shares dropped 92 cents, or 1.1 percent, to $80.98 in afternoon trading.

The Associated Press contributed to this story.