The eReader price war

At the end of last year [2009], Amazon was selling its basic Kindle for $259. In June of 2010, Barnes & Noble slashed the price of its Nook eReader to $199. Amazon immediately responded by dropping the price of the simplest Kindle to $189. That's when both companies stopped making money on the e-readers, according to iSuppli, an analysts' firm known for taking apart gadgets to estimate how much they cost to manufacture. In July, Sony dropped the price of its eReader from $169 to $149. The Nook then went down to $149 and Amazon announced that its new Kindle Wi-Fi, eventually released in August, would retail for $139.

The eReader price war in turn fueled demand for eBooks. During the first nine months of 2010, market leader Amazon sold three times as many Kindle books than during the same time period in 2009

Sources : Kindle Wins E-Reader Price Battle, But It Hasn't Won the War, by Adrianne Jeffries, Top trends of 2010: Growth of eBooks & eReaders, by Richard MacManus, on www.readwriteweb.com