A cheaper e-book reader is now available

The e-book arms race escalated further yesterday with the release of the Sony Reader Pocket Edition, a pocket-size electronic book reader available for $199. According to Sony, the new device is the "most affordable dedicated reading device on the market."

(Sony is also introducing the more expensive – $299 – Reader Touch Edition with more memory capacity. The Sony Reader Pocket Edition can hold only about hold about 350 books, with no slot for a memory card, which the Reader Touch Edition does include.)

But for publishers, what may be even bigger – and scarier – news is Sony's announcement that it will be dropping the price of new and bestselling digital books by $2 from $11.99 to match Amazon's $9.99 price for many of its digital offerings.

As the New York Times points out, for now, book publishers "will still retain their traditional cut of every e-book sale — about half the hardcover retail list price." But no guarantee that will last. What publishers fear is that, "As online retailers like Amazon and Sony gain market power, they will eventually tire of losing money on e-book sales and ask publishers for lower wholesale prices, a move that would cut into their profit margins."

What this ultimately means – for anyone involved – is still a big unknown. But as Jonathan Karp, publisher and editor in chief at Twelve, an imprint of the Hachette Book Group, told the Times, “$9.99 has now become the effective price for e-books in August of 2009. Let’s just take a breath and see how long this lasts.”