Amazon Cuts Kindle Price as E-Reader Battle Heats Up

Amazon Kindle e-readerIt's a price war!

Mere hours after Barnes & Noble (BKS) said it plans to reduce the price of its Nook e-reader, Amazon (AMZN) responded in kind by reducing Kindle prices by 30%.

Barnes & Noble announced the Nook price reduction, from $259 to $199, on Monday, and also said it would release a new lower priced, WiFi-only version of the Nook at $149. In a statement, Barnes & Noble touted the Nook as "the first under-$200 dedicated full-featured e-book reader that offers both free 3G wireless and WiFi connectivity."

Not to be undersold, Amazon acted swiftly Monday to cut Kindle prices from $259 to $189 -- $10 less than the new Nook price.

The escalating price war reflects the growing popularity of e-readers as well as the Amazon and Barnes & Noble's desire to offer a lower-priced alternative to Apple's (AAPL) wildly popular iPad tablet computer, which retails for $499 and up.

"This makes Amazon look scared," says Simba Information analyst Michael Norris. "A lot of this is insecurity because the Kindle is all about the perception of being a leading device, not necessarily actually being a leading device. And if anything challenges that narrative they're going to respond."

Amazon originally debuted the Kindle at $399 in 2007. But the advent of the iPad -- and the forthcoming flood of multi-featured tablet devices -- have driven prices for single feature devices like the Kindle and Nook ever lower.
Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.