Anthony Sowden, project lead on the e-books devices at HP's Bristol Labs said: "We envisage the device as a media viewer."
HP is also looking at integrating audio and video into the devices, which are relatively light and easy to use and have a battery life of around five hours on full brightness.
The latest prototypes use "riffling" technology that allows the device to show digital book pages that can be turned in a realistic way similar to physical books as seen in the photo above.
Books can be viewed in one-page portrait mode or two-page landscape and the device has touch strips around the edge for scrolling up and down and turning pages.
Some Jane Austen books, which are out of copyright, have been loaded on to the prototypes and HP is currently talking to the Daily Telegraph about the digital newspaper viewer.
Bill Detwiler has nothing to disclose. He doesn't hold investments in the technology companies he covers.
Bill Detwiler is Managing Editor of TechRepublic and Tech Pro Research and the host of Cracking Open, CNET and TechRepublic's popular online show. Prior to joining TechRepublic in 2000, Bill was an IT manager, database administrator, and desktop support specialist in the social research and energy industries. He has bachelor's and master's degrees from the University of Louisville, where he has also lectured on computer crime and crime prevention.