(Credit: Amazon)

You don't exactly have to be a genius to speculate that e-reader products that cost more than the entry-level iPad price of US$499 will be jeopardised by the iPad's arrival.

The Plastic Logic Que proReader is one such example, starting at US$649. However, in recent days, as Sony's dropped the price of its 5-inch Reader Pocket Edition from US$199 to US$169 (for a limited time, it claims), there's been increasing speculation that Amazon will have to respond to Apple's tablet by trimming the price of its own e-reader. And we're not talking about the $489 DX, which is almost irrelevant at this point; I'm talking plain old Kindle.

Like Sony, Amazon could come down US$30 to US$229, but the most obvious next stop for the Kindle would be US$199. The delta between the iPad and the Kindle would be a healthy US$300 and Amazon would generate a lot of interest for the Kindle at US$199 (yes, there are still plenty of folks who don't own Kindles). It's worth noting that last year Amazon offered the Kindle to employees of large book-publishing houses for the bargain price of US$150. So it would appear to have some wiggle room for pricing.

All that said, you could also argue that for Amazon, the iPad is more of a sheep in wolf's clothing than vice versa. As long as Apple is willing to let Amazon put its Kindle app on the iPad (and yes, Amazon is prepping a Kindle for iPad app as I write this), you might as well consider the iPad the Kindle 3 because it's just another e-reading device that can access the Kindle Store.

Though there have been some strong indications Amazon will add a touch-screen colour device to its Kindle arsenal, I believe that the lower end of the e-reader market presents a bigger opportunity for Amazon and where it stands to make the most gains with a Kindle-branded hardware device. At the end of the day, having a US$199 — or even a US$149 or US$99 Kindle — is the way to draw in the next layer of consumers into the e-book arena.

So will Amazon lower the price of the Kindle? We say yes, it will. We don't know when exactly, but we're willing to bet it will happen soon. Its last price shave was back in October. Six months later, it's ready for another.

Via reviews.cnet.com