Barnes & Noble cuts price for Nook

The bookseller said Monday the Nook Wi-Fi is available now for $149 online at nook.com and bestbuy.com.

The company is lowering the price for its original Nook, which has both 3G and Wi-Fi, from $259 to $199.

That's less than the $259 Kindle sold by Amazon.com, Nook's top competitor. Bookstore chain Borders Group Inc. is offering a Kobo reader that works with Borders' online bookstore for $149.99. Borders also sells other e-readers.

Traditional bookstores have struggled with increased online competition and discounters and have started focusing on the small but quickly growing e-book category.

However, Apple's iPad, which starts at $499, and a number of other tablet computers soon to be available that offer many functions, have pressured e-reader makers to lower prices.

"Barnes & Noble is admitting that when they're up against a $500 digital photo frame on acid that does everything, they can no longer keep a straight face when selling something for $259 that only does books," said Michael Norris, senior trade analyst at Simba Information. "Barnes & Noble is also responding to Borders, which is introducing value-priced e-readers, and it's also a pre-emptive strike against Amazon, which is very likely to cut the Kindle 2 price in a few months when they roll out a new version."

The Nook Wi-Fi will ship this week for online orders and will be available at some Barnes & Noble and Best Buy stores later this month. It will be in all stores later this summer.

Also, Nook users will receive a software update. The update gives all Nooks access to AT&T's national Wi-Fi network, including many restaurants, hotels and other locations.

The update also allows users to jump to a specific page number in an open e-book.

Shares rose 4 cents to $1.65 during morning trading.

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