Amazon said it would reduce the Kindle's price by $40 to $259, as well as introduce a version that can work internationally. The price reduction is clearly a preemptive move by Amazon, the current electronic book leader, to undercut new readers from Sony, Plastic Logic, and China Mobile (CHL).
Amazon said the international version of the Kindle, priced at $279, will go on sale on October 19 and allow users to download e-books wirelessly in more than 100 countries.
"We have millions of customers in countries all over the world who read English-language books," Jeff Bezos, Amazon's Founder and CEO, said in a statement. "Kindle enables these customers to think of a book and download it wirelessly in less than 60 seconds."
Amazon clearly wants to consolidate its early lead in the e-reader market, because once rival offerings come to market, consumers will have increased options. So every new Kindle Amazon can sell between now and then is another customer captured who may upgrade to newer models.
Amazon faces intense incoming competition in the e-reader space, as my colleague Alex Salkever recently noted. And of course, Apple's highly anticipated tablet computer is the elephant in the room. Many observers speculate that it could be a truly disruptive device, and a serious threat to the Kindle.
Amazon does not disclose Kindle sales figures, but analysts at Forrester believe the company will sell some 3 million Kindles in 2009 -- an increase of 1 million from their previous estimate. Tech analysis firm iSuppli predicts the e-reader market will grow more than 500 percent in 2009, from roughly 1 million units sold to more than 5 million.
Last month in a sign of the battle to come, Apple CEO Steve Jobs took a swipe at Amazon and the Kindle.
"I'm sure there will always be dedicated devices, and they may have a few advantages in doing just one thing," Jobs told David Pogue. "But I think the general-purpose devices will win the day. Because I think people just probably aren't willing to pay for a dedicated device."
Jobs couldn't resist mocking Amazon for refusing to disclose Kindle's sales numbers. "Usually, if they sell a lot of something, you want to tell everybody," he said.
Amazon's price cut follows a similar move this past July when it reduced the Kindle's price by $60, bringing the device below $300 for the first time since it was launched.
"This has grown much faster than any of us ever anticipated," Bezos told The New York Times, adding that Kindle titles accounted for 48 percent of total book sales where Amazon sold both digital and physical versions of a book, a figure Bezos called "astonishing."