Amazon's Kindle reader appeared to be the perfect product for Amazon. Its dominance of the e-book reader market was complete, it enjoyed approximately 60% of all e-book reader sales, and it was very difficult to see where the competition was coming from. There were many predictions of a “Kindle killer”, but despite the release of new readers by the likes of Sony, Barnes and Noble, Plastic Logic and Bookeen, the Kindle looked sure to hold on to its number one position.

Then the Apple iPad came along and, although it is a totally different type of device, it did look set to spoil the party somewhat. The iPad is not without some fairly major shortcomings of its own, and whilst most Apple devices seem to provoke a “love them or loathe them” reaction, the numbers of people who would buy almost anything with the Apple logo on it are certainly large enough to make a major dent in the sales of the Kindle.

In addition to the release of new, sexy hardware, Apple also negotiated with many of the big publishing houses and agreed a deal which allowed them to charge whatever they wished for e-books – on the condition that they were not made available for less on any other device – the Kindle in other words. This effectively scuppered Amazon's plans to price all e-books at $ 9.99 or lower. It certainly seems as if the price of e-books has been creeping upwards since the launch of the iPad. It does seem a little counter-intuitive that prices should rise as a result of increased competition – but that's exactly what happened.

However, when it comes to the actual e-book reader hardware, it's a very different story. Barnes and Noble have dropped the price of their Nook reader from $ 259 to $ 199. Amazon have now cut the price of the Kindle 2.0 from $ 259 to $ 189 – a significant reduction bearing in mind that it sold for $ 359 when it was first launched in February of 2009. The price of the large display Kindle DX has also been lowered from $ 489 to $ 379, an event which coincides with the device’s first upgrade which includes a higher contrast screen and a new body color.

Even the pricey DX model is now over $ 100 cheaper than the cheapest of the Apple iPad range. Neither does the iPad come with connection to the internet for free as is the case for the Kindle reader range. Of course, the iPad is much more than an e-book reader, so it may be that people are prepared to pay more for a more powerful and versatile device – even if it does have much poorer battery life and a less “reading friendly” screen (which excels for other applications).

It will be interesting to see whether these e-book reader price cuts are no more than a knee-jerk response to the release of the iPad or whether they signify a new approach to the pricing of e-book readers and e-books. It could be that companies like Amazon and Barnes and Noble might take advantage of the trend for higher priced e-books by offering lower priced hardware secure in the knowledge that they will make their profit throughout the life of the device. Or, in Amazon's case at least, it could be no more than a holding tactic until the next generation color Kindle hits the market later this year.