Amazon.com Inc is launching an updated version of its high-end Kindle electronic reader and cutting the price in a move to address the threat from Apple Inc's iPad tablet computer.

Amazon's new Kindle DX, which sports a higher-quality 9.7-inch screen, will sell for $379, down from $489, and have free 3G wireless connection with no monthly bills or annual contracts, the company said.

It was the second price cut for Amazon in as many weeks. Responding to the threat from the iPad, Amazon cut the Kindle with a 6-inch screen to $189, hours after book-selling rival Barnes & Noble Inc lowered the price on its Nook to $199. Both had cost $259.

At stake is market share for e-books, the fastest-growing segment in a moribund bookselling industry. In addition to the iPad, the Nook and Kindle also compete with Sony's Reader device. Industry experts and rivals say the field will get even busier, with more e-readers expected this year.

Apple's iPad, launched in April at a starting price of $499, can function as an e-reader, but unlike competing models, it has a color screen and can be used as a full computer. It sold more than 2 million units in its first 60 days and its own e-bookstore has quickly won market share, putting pressure on rival readers like Kindle and Barnes & Noble's Nook.

Still, some analysts say dedicated e-readers such as Nook and Kindle are appealing because they consume less power, are easier to read on, and weigh less.

Shares of Amazon.com closed on Wednesday at $109.26. The stock is down about 18 percent so far this year, less than the 32 percent decline in Barnes & Noble shares so far this year.

(Reporting by Franklin Paul in New York and Sakthi Prasad in Bangalore; Editing by Dan Lalor, Dave Zimmerman)

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