E-reader prices slashed to compete with iPad

A price war is heating up in the electronic reader market, as Amazon cut the price of its Kindle e-reader below $200 ($A228) just after Barnes & Noble did the same with its competing Nook device.

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The rapid-fire moves are fanning flames in the still-small but rapidly growing market that the book industry sees as a major part of its future.

On Monday afternoon, online retailer Amazon.com Inc. slashed the price of the Kindle by $70 to $189, just a few hours after bookseller Barnes & Noble Inc. reduced the price of the Nook by $60 to $199 and said it would also start selling a new Nook with Wi-Fi access for $149.

Both the Kindle and the original Nook can wirelessly download books over high-speed data networks; the Nook also has Wi-Fi access.

Both e-readers are creeping closer to the price of bookstore chain Borders Group Inc.’s new $149 Kobo e-reader, which will be available in July and work with Borders’ online bookstore.

The cuts mean the price gap between these products and Apple Inc.’s touchscreen iPad, which starts at $499 ($A569), is getting ever wider.

The popularity of the iPad, along with a number of other tablet computers soon to be available that offer many functions, have pressured e-reader makers to lower prices.

Michael Norris, a senior trade analyst at Simba Information, said the Nook’s price cut indicates Barnes & Noble “is admitting that when they’re up against a $500 digital photo frame on acid that does everything, they can no longer keep a straight face when selling something for $259 that only does books”.

He was also expecting Amazon to reduce the Kindle’s price, but not so quickly. “I think it just makes them look really insecure and reactionary,” he said.

Despite all the hubbub, the market is still small. Nine per cent of US adults bought at least one e-book last year, he said. Barnes & Noble shares fell 55 cents, or 3.2 per cent, to finish trading at $16.52. Amazon shares declined $3.28, or 2.6 per cent, to $122.55.

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