Citigroup’s Mark Mahaney has upped his original estimate of Amazon (NSDQ: AMZN) Kindle sales, forecasting 380,000 units sold in 2008. That’s double the 190,000 he forecast earlier for Kindle’s debut year. Now, via Reuters, Mahaney is telling clients the electronic book could be one of the hottest gifts of the holiday season—along with the iPhone—and compares it to the first year of iPod sales: “Turns out the Kindle is becoming the iPod of the book world.” He’s also upped his revenue estimate for Kindle and related items to $1 billion by 2010, up from $400-750 million. This no doubt will drive the fashionably dismissive bunch nut. Ditto for the “how-dare-you” set when it comes to comparing the clunky Kindle to the oh-so-sleek iPhone.

The Kindle launched last November at $399; Amazon dropped the price by $40 in May. It wouldn’t be surprising to see a new model for the holidays. As a Kindle owner, I can safely say there’s a lot to improve both in terms of style and software.