Amazon.com has cut prices and added features to its best-selling product, the Kindle, to defend it against the threat from Apple's popular iPad and a forthcoming slew of Android-based tablets and maintain its hold on the still-growing market for e-readers.
The two new Kindle models are thinner, lighter and faster than their predecessors. The high-end version, which works on mobile 3G networks and Wi-Fi, maintains the $189 price tag. The new Wi-Fi-only model costs $139. It was only last month that Amazon dropped the price of the older 3G-compatible model from $259 to $189.
The new Kindle models are designed to make it easier to download and read e-books and to further distinguish Amazon's e-reader from multipurpose media tablets like the iPad, which has sold nearly 3.5 million units since its release in April.
The Kindle is the centerpiece of Amazon's strategy to capitalize on the growing consumer market for digital books. Amazon offers bestselling e-books for $9.99 that can be read only on the Kindle or an iPad, iPhone or other mobile device running Kindle software. Mimicking the success of Apple's iTunes music store, Amazon.com is seeking to establish its e-reader format as the default for consumers while it is still the market leader.
"We're trying to build something that's great for long-form reading -- something you'd use if you want to sit down and read for two hours," Bezos told Bloomberg News in an interview this week. "Our mission on the device side of the business is to use the latest technology to make the very best purpose-built reading device. We think that's a mass product."
In addition to being thinner and lighter than the previous models, the new Kindles boast faster page turns and sharper screen resolution. They are designed to be more readable in sunlight and to provide a month of battery life from a single charge, nearly double that of the previous model. Apple's iPad has drawn some criticism about its readability and ability to stay cool in bright sunlight, including the recently filed lawsuit in which three users accuse Apple of false advertising because their iPads overheat too easily in the summer sun.
After the iPad launch in April, many observers predicted that interest in fixed-function e-readers like Kindle would fade, despite the substantial price premium for the iPad, which costs $499 to $829, depending on configuration.
Amazon said last week, however, that Kindle sales had accelerated every month since April, though it didn't disclose specific revenue or sales figures. Amazon said its sales of e-books topped hardcovers sales, and Bezos predicted that they will overtake paperbacks in nine to 12 months to become Amazon's biggest category of books.
The 3.27 million iPads Apple has sold since its April 3 release already surpasses the Kindle's 3 million units, according to an estimate by Susquehanna Financial Group.Amazon controlled about 95 percent of the U.S. e-book market at the beginning of the year, according to Yankee Group, but competitors are gaining ground. By the end of this year, the market is likely to be split roughly into thirds among Amazon, Apple and Barnes & Noble, which makes the Nook reader, the research firm estimates. The Nook costs betwenn $149 and $199 for the 3G/Wi-Fi model.
In addition to the lower prices on Kindle, which could pressure Apple to cut iPad prices, the new lighter weight will also help Amazon distinguish its e-reader from Apple's multipurpose tablet. In addition to the criticism about readability and overheating, some iPad users have complained that its 1.6-lb. weight can make long periods of reading on the device tiresome. At at only 8.7 oz., the new Kindle is about one-third the weight of the iPad, making it much more comfortable in its fixed function, as an e-reader.