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Originally Posted by jswinden
All Kindles handle images, even color images. The Kindle eInk readers only display 16 levels of grey, so color images will vary in quality, but they usually look really good.
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The eInk Kindles, of course, have to convert color images to greyscale for display. The recent models can display 16 levels of grey. This will usually do an excellent job of displaying B&W & greyscale images and most color images display very well.
As with any color to greyscale conversion, occasionally two different contrasting colors convert to the same grey. If these are side by side the result is sometimes poor. I've viewed nearly a thousand color images, mostly covers, on my K3 (same greyscale display as the basic Kindle) and only rarely have I seen issues with color conversions. These few have been almost exclusively covers where the colored text fails to standout from a differently colored but similar brightness background. The other failures have been charts with colored lines. Sometimes the colors produce distinctly different greys and can be distinguished provided there is a similarly colored legend. At other times it's impossible to tell one from the other either because they end up the same grey or black or because there is no colored legend and the only reference is in the text (e.g. "the red line indicates ...").