NEW YORK - A price war is heating up in the electronic reader market, as Amazon.com Inc. cut the price of its Kindle e-reader below $200 this week after Barnes & Noble did the same with its competing Nook device.
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.
Online retailer Amazon slashed the price of the Kindle by $70 to $189 this week, 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.
Seattle-based Amazon has lowered the Kindle's price several times since the e-reader with a gray-scale screen debuted in 2007 at $399. In October, the online retailer dropped the price to $259 from $299. Amazon also sells a larger-screen Kindle, the Kindle DX, for $489. The Nook was released late last year for $259.
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.
And the cuts mean the price gap between these products and Apple Inc.'s touchscreen iPad, which starts at $499, 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, has pressured e-reader makers to lower prices.
Michael Norris, a senior trade analyst at Simba Information, said the Nook's price cut indicates New York-based 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."
And the price cuts might get some more people to hop on the e-reader bandwagon, but he doesn't think they will end up creating some sort of tipping point that will get people to commit to buying tens of millions of e-books. Despite all the hubbub, the market is still small: Nine percent of U.S. adults bought at least one e-book last year, he said.