As the dust settles from Kindle's price cut and international rollout, a key analyst is upping his sales estimate for Amazon's electronic reader. Citigroup's Mark Mahaney now believes that Amazon will sell 1.5 million Kindles this year -- 500,000 higher than his previous estimate. Likewise, he's saying Kindle revenue could jump to $700 million from $550 million.

Mahaney writes in a research note that Amazon's Kindle price cut -- from $299 to $259 -- is "typical" of the ecommerce giant, coming "prior to the market having a viable competitor." He said the price cut "sets up the Kindle for a full runway for Q4" and increases the reader's chances of becoming "one of the hit products of the holiday season."

He estimates that Kindle will sell 2.7 million units and do $1.5 billion in revenue in 2010, roughly 5 percent of Amazon's total revenue. Amazon hasn't revealed any numbers on Kindle sales -- and CEO Jeff Bezos has suggested the company may never give up that information -- so a lot of this is reading tea leaves.

Amazon's big competition in the e-reader market, Sony, is ramping up its advertising ahead of the holiday season. And there's a bunch of other companies are making plans to jump into the fray, including Irex, Asus, and Plastic Logic.

Forrester Research today boosted its projection for total e-reader sales, saying they'll now reach 3 million units in 2009, with 30 percent of sales occurring during the November-December holiday shopping season. That's up 50 percent from Forrester's previous projection of 2 million units in 2009. The research firm said further that e-reader sales could reach beyond 6 million in 2010.

Forrester analyst Sarah Rotman Epps cited "fall device prices, more content availability, better retail distribution and lots and lots of media buzz." But she added a big caveat:

The success of the holiday season, and next year's growth, depends a lot on retailers and the extent to which they improve in-store merchandising for eReaders. Best Buy is in the process of rolling out "Gadget and eReader" sections in all its stores, and training its staff to be more equipped to sell eReaders. But walk into your typical Borders bookstore, as I did recently, and you're likely to get quizzical looks from sales staff when you ask about eReaders and have a hard time finding the kiosks where the devices are on display.

Retailers we spoke with are making changes to improve the merchandising experience, but we're realistic about the limits of what they can change in a single season. Our holiday projections should be seen for what they are: An acknowledgement that 2009 has been and will be a year of breakout success for eReaders, tempered by realism that retailers, despite their best intentions, are still learning how to sell these products to curious but uninformed consumers.

Of course, if brick-and-mortar retailers can't get their act together to properly sell e-readers, that could benefit Amazon, which maintains an online-only sales channel for Kindle.

A few other follow ups from Amazon's Kindle announcement last night:

• International users of Kindle will have access to 200,000 English-language books, a smaller selection than than the 350,000 titles in the U.S. They also face some additional charges, according to Amazon's fine print: "U.S. customers will be charged a fee of $1.99 for international downloads."

• Publishers making titles available for the international Kindle include Hachette, HarperCollins, Penguin, and Simon & Schuster. Publishing giant Random House is apparently a holdout.

• Amazon CEO Jeff Bezos and other company executives are now saying that for books available in hardcover and Kindle digital form, Kindle titles make up 48 percent of the books' total sales, up from 35 percent in May.

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