(Reuters) – Amazon.com Inc and Barnes & Noble Inc slashed prices on their rival electronic book readers on Monday, responding to intensifying market competition and the success of Apple Inc’s iPad.
Stock in both companies fell about 3 percent in afternoon trade as investors feared a looming price war.
Amazon announced a $70 price cut — from $259 to $189 — to its Kindle e-reader amid intensifying competition in the fast growing electronic books industry.
Amazon’s move came after Barnes & Noble introduced a new Wi-fi version of its "Nook" electronic book reader and lowered the price on another.
Barnes & Noble, the No. 1 U.S. specialty bookseller by sales, introduced a $149 Wi-Fi only version of Nook and reduced the price on its 3G compatible Nook to $199.
The move comes as Apple’s iPad, launched in the spring, has drawn many shoppers to its e-bookstore and Borders Group Inc gets ready to open its own e-bookstore.
Barnes & Noble introduced Nook in October. The company is set to report its fourth-quarter earnings next Monday.
Shares in Amazon were down 2.8 percent to $122.27, while Barnes and Noble stock was down 3.2 percent to $16.52.
(Reporting by Phil Wahba and Carolina Madrid)