In latest bid for e-book customers, Sony will release $199 Reader, a third off Kindle price

New Sony e-book reader $100 cheaper than Kindle

SAN FRANCISCO — Electronic books are often mentioned in the same breath as Amazon.com Inc.’s Kindle digital reader. Now e-book rival Sony Corp. is determined to recapture consumers’ attention with a smaller reader that’s also $100 cheaper.

On Wednesday, Sony is expected to announce that it will release the Reader Pocket Edition by the end of August. Like the Kindle and Sony’s previous Readers, the Pocket Edition will come with an “electronic ink” display, which shows dark gray text on a lighter gray background. As the word “pocket” implies, its five-inch screen will be smaller than that on the Kindle and other Sony models.

Unlike other Readers, the Pocket Edition won’t play digital music files, and it won’t have a slot for a memory card to supplement internal storage that can hold 350 books.

It will retail for $199, a third off the price of the basic Kindle model and about $80 less than Sony’s PRS-505 reader, which will be discontinued. Color choices include blue, red and silver.

The device is entering a small but growing market. U.S. e-book sales totaled $113 million last year — up 68 percent from 2007 but still a fraction of the estimated $24.3 billion spent on all books, according to the Association of American Publishers.

Steve Haber, president of Sony’s Digital Reading Business Division, expects the Pocket Edition’s price tag will lure new consumers who haven’t wanted to shell out for such a device thus far.

And he’s not worried that the Pocket Edition’s chances for success will be diminished by the rising popularity of reading e-books on smart phones like the iPhone and BlackBerrys.

“Once you see it, it’s been a consistent response of, ‘That’s cool,’” he said.

Sarah Rotman Epps, a media analyst at Forrester Research, said the Pocket Edition’s price below $200 breaks an important psychological barrier.

“This is something that is affordable for the holiday season, and I think that you’ll see sales of e-readers outpacing current forecasts,” she said.

Her current forecast calls for sales of 2 million digital reading devices this year; she said a little more than 1 million were sold by the end of 2008.

She doesn’t expect Amazon to rest on its laurels, adding that the online retailer will have to respond to counter Sony’s new price point.

Sony is also announcing on Wednesday the release of a $299 touch-screen model to replace its existing $350 touch-screen PRS-700. The Touch Edition will have the same six-inch screen as its predecessor but not the PRS-700’s built-in light. Haber said removing the light will correct some screen clarity problems it has caused.

With the PRS-700, users can highlight text and take notes with a touch-screen keyboard. On the new model, users also can write notes with a finger or a stylus that is included.

The new model has a built-in dictionary and is faster at changing pages when readers swipe a finger across the screen. It will sell in red, silver or black and can hold 350 books in its built-in memory or more on a memory card.

A big difference between Sony’s Readers and Amazon’s Kindle has always been the lack of wireless access for quick and simple downloads of books. The new models are no different: They have to be connected to a computer to acquire books.

For the first time, they will be compatible with PCs and Mac computers, though. Sony will offer current Reader owners a software update to make theirs compatible with both.

As he has indicated in the past, Haber said Sony is working on a wireless model, though he wouldn’t say when.

Sony also is adjusting prices to some of the e-books it sells through its online eBook Store. New releases and best-sellers will now sell for $10, $2 less than current prices. Amazon’s Kindle Store offers most best-sellers and new releases for $10.

Sony’s eBook Store includes more than 100,000 books, as well as a million free public-domain books available from Google Inc. through its Google Books project. The Kindle Store currently has more than 330,000 available titles.

The Kindle can only download books from Amazon’s store, while Sony’s Readers can display texts sold in the “epub” format — an open standard supported by the International Digital Publishing Forum that numerous publishers use to make e-books.