E Ink, who manufactures the display for the popular Kindle (and Kindle DX, available for pre-order), was bought by Prime View International. This news is all over the web, but I noticed something more interesting among the boring, “this business bought this other business” dribble.

About half-way down in the press-release, there is mention of a color E Ink display to be shown at an up-coming Exhibition in San Antonio:

The deal will help the combined company develop color versions of its displays and mass produce them by the end of 2010, said Sriram Peruvemba, E Ink’s vice president of marketing. Current models show shades of gray.

Privately held E Ink is expected to demonstrate its latest color display prototypes Tuesday at a display technology show in San Antonio.

If the color E-ink displays make it to another revision of the Kindle, I think we can expect another Kindle “craze.” This would be especially true in the academic and professional markets, who were quick to point out the loss experienced when viewing graphs and charts best viewed in color.

A color display would also benefit most Kindle users who take advantage of the included web browser. We’ve all come to associate surfing the web with a full-colored experience. The color display will make this a possibility.

I’m really curious how well the color displays will work. A few questions in my mind are:

• Will the screen refresh rates be faster, slower, or the same?
• The current kindle displays only provide 16 shades of gray. Will the color displays be like the 8-bit displays of the past, or more like current displays?
• Most importantly, how cost will a color display add to the Kindle?

The cost could be a sticky point. Many people already think the Kindle is priced a bit on the high side and I don’t expect a color display to be less expensive. How Amazon handles the price point for a Colorized Kindle may be very interesting.