Amazon announced today that it’s dropping the price of its Kindle e-reader from $259 to $189. E-readers are in a tough spot right now: there’s a variety of options for sale, and then there’s that pesky multi-purpose tablet market.

The change happens to fall on the same day as Apple released its iOS 4 update. The iPad – Apple’s closest product to the Kindle – isn’t compatible with the new software (yet), but the update does bring Apple’s iBooks application to compatible iPhone and iPod devices.

Expect to see more of the same in the coming months. This battle is just getting started.

Link: Amazon Kindle