Price War Brewing In E-Reader Market

Amazon chopped the retail price of its Kindle from $259 to $189 and prominently featured the new price on its main Web page. The larger Kindle DX is still priced at $489.

Amazon also said customers who bought a Kindle that shipped within the past 30 days were eligible for a credit for the price difference.

Early Monday Barnes & Noble cut the price of its original Nook, which offers both Wi-Fi and 3G connectivity, from $259 to $199. The new Nook Wi-Fi, which doesn’t provide 3G connectivity, is available immediately for $149.

Barnes & Noble said the new Wi-Fi-only device provided many of the same physical features as the original, such as the color touch screen for navigation and E-ink display. The company also offered an update to its Nook software, to version 1.4, which provides improved connectivity.

Barnes & Noble said customers who purchased a Nook in the past two weeks could get a $10 refund, reflecting the difference between a recent promotional price and the new price.

Amazon and Barnes & Noble are apparently feeling the competitive heat from Apple’s fast-selling iPad device, which can be used as an e-reader -- among many other applications. While the iPad is hardly price-competitive with the e-readers, some consumers are likely buying the multipurpose Apple product instead of the single-function e-readers and that may be forcing the price cuts.

E-reader vendors also have been working to expand sales through more retail outlets. Earlier this month Amazon began selling the Kindle through Target department stores.