Amazon on Thursday also introduced the third generation of the original Kindle, which has Wi-Fi and 3G wireless technologies. The latter makes it possible to buy digital books from Amazon and download them in less than a minute. Amazon kept the price for the device at $189.
Both Kindles are about $10 less than comparable e-readers from rivals Barnes & Noble, Borders and about $30 less than Sony's device, excluding the $25 e-book gift card Sony gives with each purchase.
Besides lower prices, the latest Kindles have several improvements over previous generations. While the size of the screen remains six inches diagonally, the display is based on manufacturer E Ink's latest technology, which offers a contrast ratio about 50% greater. While the screen only displays black-and-white, its high resolution makes it possible to read text even in direct sunlight, an advantage over the LCD displays used in Apple's iPad and smartphones.
In addition, Amazon has made the Kindle 21% smaller through a sleeker design and has reduced the weight by 15% to 8.7 ounces. The latest models have a battery life of a month and twice the storage, which is enough to carry up to 3,500 digital books.
While Amazon has prepped the latest Kindles as stiffer competitors, the retailer won't be able to start shipping the e-readers until Aug. 27. Amazon suspended shipments on Wednesday, but is taking pre-orders.
Nevertheless, Amazon is making the Kindle available in time for the back-to-school shopping season. The retailer is also pressuring competitors to lower prices, as the industry moves closer to offering devices possible as low as under $100, which analysts say would be low enough to be a compulsive buy for consumers.
Amazon's latest releases reflect an industry shift toward making money on the sales of e-books instead of the e-readers, since the lower prices are meant to get the devices in the hands of potential book buyers.
This strategy is apparently working for Amazon. the company this month announced that unit sales of e-books surpassed that of hardcover books. On Wednesday, Amazon said Swedish author Stieg Larsson has become the first writer to sell more than 1 million digital books on Amazon. Larsson is the author of the bestselling "Millennium Trilogy."
The growth rate of e-books sales for Amazon has been impressive, given that digital books overtook hardcover books in less than three years. Amazon has been selling hardcover books for 15 years.
However, competition could get tougher, not just from other e-readers, but also from the emerging category of tablet-style computers, such as the iPad. While the Apple computer starts at more than $300 more than the cheapest Kindle, it does considerably more besides acting as an e-reader. The device also surfs the Web, accesses e-mail and plays video, music and games.