Amazon offers £109 wireless Kindle for mass appeal launched a cheaper, wireless-only Kindle on Wednesday, betting that the lower price will turn its latest electronic reader into a mass-appeal device as Apple Inc's iPad gains ground.

The world's largest online retailer and leading e-reader seller also revealed its third generation Kindle, some 21 per cent smaller and 15 per cent lighter than the previous version, but still priced at $189.

Amazon does not give sales figures for the Kindle, but said last week that its growth rate tripled after it cut its price on the device and said e-books were outselling hardcover books. Apple has said it sold more than 3 million iPads since the product was introduced in April.

"At these price points, we're starting to accumulate evidence that this is a mass product," said Chief Executive Jeff Bezos in an interview at company headquarters in Seattle. "This is a very broad audience."

Amazon's sales success with the Kindle has allowed the company to lower the price even as rival devices have entered the market, he said.

"We've sold millions of the prior generation of Kindle and we're going to sell millions of these," Bezos said. "And when you get up into that kind of volume, you're able to do a lot of things with the manufacturing models and supply chain in terms of driving down the cost."

The devices, which are now available for preorder, will begin shipping 27 August.

Amazon has improved the contrast on the screen of its newest Kindles, but the size of the 6-inch reading area remains the same. Page turns are also faster and some 3500 books can now be stored, double the previous amount. Both models have a one-month battery life.

Forrester analyst James McQuivey said he had not expected a lower-priced Kindle until later in the year.

"It suggests that Amazon really means it when they say they're in this device business to stay," he said.

The Kindle has been a much talked-about growth engine for Amazon and a departure, given the company's strength in retailing, not manufacturing. But Amazon has managed to parlay its vast collection of book titles into a revenue driver for the Kindle, where the bulk of its 630,000 digital books on offer can be ordered for lower prices.

The Kindle, introduced in late 2007, has gone through a series of price reductions in light of increased competition from Sony Corp, Barnes & Noble, and most recently the iPad, a multimedia tablet that includes e-reader functions.

E-readers allow consumers to read books, magazines or newspapers on a paperback book-sized tablet that downloads content digitally. Although an instant hit with gadget hounds, their relatively high price has been a barrier to many.

Although the market for tablet computers is expected to soon eclipse that for e-readers, Amazon's latest move gives the company some breathing room, McQuivey said.

"Amazon wants to sell you enough of these so you can have a couple lounging around the house. It becomes a new bookshelf. That's the model they're going for," he said.