A new Kindle eBook reader dubbed Kindle 3 was rumored just a week after Kindle 2 started shipping on February 23rd. Back then the rumor already said that the new Kindle 3 scheduled for Fall would have a bigger screen. The NY Times features a story today claiming that sources indicate that Amazon is releasing a big screen Kindle this week. Update: Amazon has just sent out invitations for a media event scheduled for Wednesday. New Kindle 3 is to be expected. (Via Engadget).

The new Kindle 3 would be aimed at displaying newspapers, magazines and possibly textbooks. As reported the Hearst the publisher of Cosmo and many other publications is planning a large format eBook reader.
Amazon will surely do everything they can to keep their first mover advantage in the electronic paper market. The Kindle has been slowly establishing itself as the most complete eBook experience. A larger version of the Kindle would not really do the trick to be appealing for reading magazines and newspapers. A color ePaper screen would help, but pricing of the device will be a huge factor as well.

As mentioned before eBook and eMagazine readers are only going to go main stream if you can roll them up or fold them like real paper.