The E-Reader market is heating up, and Amazon is starting to look at the competition with actual concern. That's the most likely reason I can think of for today's surprise announcement of a substantial price cut for the Kindle 2. After 5 months on the market, Amazon is cutting $60 off of the price tag.

This brings the Kindle 2 down to $299. Engadget thinks that $300 looks to be the 'magic number' for E-Readers, and I tend to agree. When a device like the Kindle 2 costs more than some netbooks (which have much more functionality) customers are going to be less likely to buy it. I think it's likely we'll see most of the next-generation E-Readers introduced at or under $300.

If you're in the market for an E-Reader, I'd wait a few months before jumping on this. The price isn't going to rise anymore, and we're going to see a spate of new E-Readers hit stores in the last quarter of this year.