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How Low Will Kindle Prices Go?

NEW YORK ( TheStreet) -- Amazon (AMZN - Get Report) introduced its newest Kindle e-reader on Thursday, once again slashing the price of the device. But how much lower can prices go?

The smaller, lighter version of the device, which has 3G and Wi-Fi connectivity, is priced at $189, while the Wi-Fi only version costs $139, making it the cheapest e-reader among major brands on the market. Both versions will begin shipping on Aug. 27.
Amazon Kindle

"If you don't need the convenience of 3G wireless, we have an incredible new price point -- $139 for Kindle Wi-Fi. At this price point, many people are going to buy multiple units for the home and family," CEO Jeff Bezos said in a statement.

Amazon also still has the pricier Kindle DX, which boasts a larger screen and sells for $379, after originally being priced for $489.

After the launch of Apple's (AAPL - Get Report) iPad -- which, along with an e-reader option, offers a multitude of Internet browsing options and applications -- fears surfaced about the lifespan of a dedicated e-reader. Apple announced last week that the iPad, which starts at $499, sold 3.3 million units since it rolled out in April.

The imminent launch of a tablet device by Google (GOOG), is also adding to the pressure.

As a result, companies took action. Barnes & Noble (BKS - Get Report) was one of the first to slash prices, reducing its Nook to $199 from $259. Only hours later, Amazon made a similar move, lowering its Kindle 2 to $189, a $70 discount.

When the original Kindle launched in 2007, it was priced at $399, and by last year dropped 35% to $259.

A lesser-known brand, Copia, a subsidiary of DMC Worldwide, plans to introduce a 5-inch color e-reader for just $99 this fall. "The iPad disrupted pricing strategy for everyone in the e-reader market, and after the price wars with Barnes and Noble and Amazon, everyone's trying to differentiate themselves from a price-point perspective," Tony Antolino, senior vice president of DMC Worldwide, said in a statement. "We decided to do a revision of our hardware positioning."
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