Amazon, the online retailer, introduced its reduced-price Kindle into the increasingly competitive e-reader market as it attempts to fend off new competitors. The e-book market has changed since the Kindle was first released. New competitors have sprouted with competing devices at almost every price point in existence.

The cheaper Wi-Fi version of the Kindle, which costs $US139, will be launched on August 27. It is also available for pre-order now though the Amazon online store.

Alongside the Wi-Fi Kindle will be an improved version of the 3G Kindle. The device which comes 21 per cent smaller, has sharper contrast, double the storage, Wi-Fi, and a full month of battery life, will go for $US189. Amazon has been the market leader since the 2007 release of the Kindle in the US. The Australian market, in the meantime, has been slow on the uptake of the e-reader technology as book retailers continue to push hardware agenda. The device first appeared in the country last year. Local retailers then launched competing devices. A format called ePub then gained ground, causing a greater number of e-reader devices to remain untied to specific outlets.

In spite the fact that the Kindle has remained the most popular item on Amazon.com for the past two years, the company has introduced price drops in response to stronger competition.

The company revealed that growth had tripled since it cut its price from $US259.

Makers of e-book readers hope that the lower price and the availability of a broader range of content such as magazines and newspapers will attract a younger audience.

"Barely a day goes by without an announcement of a new device release or acquisition... competitors will attack Amazon's market position by launching new features, expanding content beyond books, dominating markets outside the US, reducing costs, and improving relationships with publishers," said Forrester, an American research firm.

In an interview with Reuters, Jeff Bezos, chief executive of Amazon, says that "at these price points, we're starting to accumulate evidence that this is a mass product."

The addition of free games for the Kindle might also help broaden the gadget's appeal. The company says that its bookstore now contains more than 400,000 titles in Australia. This is in addition to 1.8 million free, out-of-copyright, pre-1923 books.