U.S. e-reader prices slashed as battle for eyeballs heats up

The likely inevitable price war in e-readers has broken out, big time, in the U.S. It can't be long before similar price-cutting occurs in Canada. Today, according to a story in the Wall Street Journal, Barnes & Noble cut the price of its Nook reader to $199 and introduced a wi-fi model for only $149; and Amazon.com followed suit by lowering the price of its Kindle to $189.

Both the Nook and Kindle previously sold for $259. While that was well below the iPad's starting price of $499, the e-readers lack the hit Apple product's color screen, ability to display video and websites, and thousands of specialized applications, or apps.

The moves aren't likely to end the gyrations in the nascent e-reader market. In coming weeks, both Amazon and Sony Corp. plan to unveil new versions of their devices, said people briefed on the matter. Analysts believe the new products also will emphasize lower prices.

Barnes & Noble said it dropped the Nook's price so it could reach a wider group of potential customers, especially ones who aren't hard-core readers. Amazon declined to comment beyond a press release that simply announced the price cut.

A price war for low-end e-readers could force Barnes & Noble and Amazon to rely more heavily on their profit from selling e-books. Under so-called agency sales agreements with many top publishers, e-bookstores keep about 30% of the sale price of e-books.