The New York Times reports that 
Amazon.com will introduce two new versions of the Kindle e-reader on Thursday, one for $139, the lowest price yet for the device. Amazon is hoping to convince even casual readers that they need a digital reading device. By firing another shot in an e-reader price war leading up to the year-end holiday shopping season, the e-commerce giant turned consumer electronics manufacturer is also signaling it intends to do battle with Apple and its iPad as well as the other makers of e-readers like Sony and Barnes & Noble.Unlike previous Kindles, the $139 “Kindle Wi-Fi” will connect to the Internet using only Wi-Fi instead of a cellphone network as other Kindles do. Amazon is also introducing a model to replace the Kindle 2, which it will sell for the same price as that model, $189. Both new Kindles are smaller and lighter, with higher contrast screens and crisper text.
“The hardware business for us has been so successful that we’re going to continue,” Jeffrey P. Bezos, Amazon’s chief executive, said in an interview at the company’s headquarters. “I predict there will be a 10th-generation and a 20th-generation Kindle. We’re well-situated to be experts in purpose-built reading devices.”
When Amazon introduced the Kindle in 2007, Mr. Bezos described it as a must-have for frequent travelers and people who read “two, three, four books at the same time.” Now, Amazon hopes that at $10 less than the least expensive reading devices from Barnes & Noble and Sony, the new Kindle has broken the psychological price barrier for even occasional readers or a family wanting multiple Kindles.
“At $139, if you’re going to read by the pool, some people might spend more than that on a swimsuit and sunglasses,” Mr. Bezos said.
Some analysts are predicting that e-readers could become this year’s hot holiday gift. James L. McQuivey, a principal analyst specializing in consumer electronics at Forrester Research, said a price war could for the first time reduce at least the price of one e-reader to under $100, often the tipping point for impulse gadget purchases.
The new Kindle is 21 per cent smaller and 15 per cent lighter than the Kindle 2, great for those like me who enjoy reading in bed. Even with a smaller form factor, the familiar 6-inch screen is still present with 50 per cent better contrast (same as the Kindle DX). Improved contrast and font rendering aren’t particularly noticeable for books, partly because it was never an issue with the Kindle 2, but the changes are nice for reading newspapers.
Amazon has slashed the price of the Kindle at a speed that is unusual, even for electronic gadgets. By last year, the price of the device was to $259, down from its starting price of $399 in late 2007. In June, hours after Barnes & Noble dropped the price of its Nook e-reader to $199, Amazon dropped the price of the Kindle to $189. The Kindle DX, which has a larger, 9.7-inch screen, is $379.
With Amazon’s latest announcement, it is again waging a price war. Barnes & Noble offers a Wi-Fi version of the Nook for $149 and Sony offers the Reader Pocket Edition, which does not have Wi-Fi, for $150.
Although the market for tablet computers is expected to soon eclipse that for e-readers, Amazon's latest move gives the company some breathing room, Forrester analyst James McQuivey said.
"Amazon wants to sell you enough of these so you can have a couple lounging around the house. It becomes a new bookshelf. That's the model they're going for," he said.
International Business Times says that, though Amazon does not release sales figures, e-books now outsell hard copies. The new Kindles will begin shipping August 27th.
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