There’s nothing like a good deal, and Amazon is hoping that its recent price cut to the Kindle 2 e-book reader will attract more buyers.

 

Amazon quietly dropped the price of the Kindle 2 from $359 to $299. The wireless device, which rolled out in February, can hold about 1,500 books from an available library of more than 230,000 books. Amazon’s Kindle Store has more than 300,000 books available, plus top newspapers, magazines, and blogs.

 

Competition among a crowded e-book market likely was a factor in Amazon’s $60 price cut for the Kindle 2. It’s the first price reduction in the product’s history. As TMCnet reported, Ross Rubin, an analyst with The NPD Group (News - Alert), said the price needed to drop for the Kindle to reach broader audiences.

 

Amazon reportedly said that an increase in production volume allowed the company to pass savings on to consumers, according to The Christian Science Monitor. The company hasn’t disclosed sales figures for its Kindle products.

 

And with the price cut, analysts appear optimistic of Amazon’s Kindle sales. For example, Sandeep Aggarwal, an Internet research analyst at Collins Stewart, said in a report this week that the Kindle would generate $310 million in revenue and $70 million in profit this year for Amazon, according to the New York Times. The company’s revenue is projected to grow to $2 billion and $560 million in profit by 2012, the report said.

 

For now, no price changes are planned for Amazon’s larger-size Kindle DX, which launched in May. That device, which boasts a display 2.5 times the surface area of the Kindle’s 6-inch screen, costs $489. Much of the hype around the larger-size Kindle is that it may bolster the flagging newspaper industry, long hamstrung by a loss of ad revenue to the Internet. The device is currently sold out on Amazon’s site.

 

As TMCnet reported, Google said it plans to introduce a program of its own that would let publishers sell digital versions of their newest books direct to consumers. The company held discussions with publishers about entering the e-book market at the annual BookExpo convention in New York to test the waters. Another competitor, Sony Corp. announced a so-called “eBook Store,” could challenge the Kindle. The e-store provides access to more than 500,000 public domain books available through Google’s Web site.

 

Start-up Pixel Qi (News - Alert) is another playing looking to capture market share from Amazon with its 3qi device. The new notebooks, which include e-reader functions, will likely feature displays that can swivel around to cover the keyboard and a tablet mode ideal for e-book readers, TMCnet reported.