Amazon Drops Kindle DX PriceAmazon Drops Kindle DX Price

Amazon has introduced a new version of the Kindle DX and has slashed the price of the premium electronic reader.

The $110 price cut announced Thursday reflects how the online retailer is more interested in using its popular e-readers to drive sales of digital books. Having cut prices dramatically on the standard Kindle and now the DX model, Amazon is likely selling the devices at a loss, industry observers say.

The new Kindle DX, which ships July 7, has a higher contrast digital paper display and sells for $379. The display, which offers clearer text and sharper graphics than its predecessor, incorporates the latest technology from manufacturer E Ink.

Called "Pearl," E Ink says the contrast ratio of the display is about 50% greater than the previous generation. E Ink technology, which is used in most e-readers, only displays text and graphics in black and white, but offers a reading experience with less eyestrain than a typical LCD screen used with PCs. In addition, E Ink-powered displays can be viewed in direct sunlight with no glare.

Amazon started taking pre-orders Thursday for the new Kindle DX, which sports a 9.7-inch diagonal screen. The standard Kindle has a 6-inch screen and sells for $189. Both e-readers come with 3G wireless technologies that Amazon provides without charge for buying and downloading e-books from its store.

Amazon cut the price of the smaller Kindle last week from $259, just hours after Barnes & Noble dropped the price of the competing Nook to $199. The moves reflect an ongoing price war among e-reader vendors willing to sell the devices at a loss to boost the sales of more profitable e-books.

Amazon's focus on selling e-books is reflected in other recent announcements. The retailer this week released a new version of the Kindle software that makes it possible to play audio and video embedded in e-books. The new app is only for Apple's iPhone, iPad and iPod Touch, but is expected to be expanded to other platforms in the future.

In releasing the software, as well as a handful of multimedia books for $10 each, Amazon is trying to stay ahead of rivals, particularly Apple. The latter company launched its own iTunes bookstore along with the iPad tablet computer in April.

In addition, Amazon raised the royalties it pays author and publishers that use the company's self-publishing Kindle Digital Text Platform to 70%, providing they agree to a number of restrictions, including keeping prices at no more than $9.99.