Online retail company Barnes & Noble has slashed the prices for its Nook e-book reader by $60, initiating a price war in the e-reader market.
The Barnes & Noble Nook, which was launched this year with a list price of $259 (£175), is now available for $199 (£135).
Amazon followed suit by slashing the list price for its popular Kindle device down from $259 to $189 (£128).
The price cuts follow the introduction of Apple's iPad into the market.
Since the release of the iPad, both Amazon and Barnes & Noble have seen their share prices drop.
The ibook application has quickly become a major player in the industry, offering thousands of e-books available for download on the iPad, as well as the iPhone 4, iPhone 3GS and iPod Touch devices.
Barnes & Noble are planning to introduce a Wi-Fi version of the Nook in the near future to counter the increased competition.
Tony Astarita, vice president of digital product at Barnes & Noble said: “People who love to read will find tremendous value with the new Nook Wi-Fi, the most full-featured, low-cost eReading device on the market, and our bestselling Nook 3G now at an even lower price.”