Oct. 7 (Bloomberg) -- Amazon.com Inc. introduced an international version of its Kindle electronic reader that works in more than 100 countries and lowered the price of its U.S. version by $40 to $259.

The international Kindle begins shipping Oct. 19 at a price of $279, Seattle-based Amazon.com said today. Until now, the device was only available in the U.S.

Amazon.com, which introduced the Kindle in 2007, is trying to extend its dominance in the electronic-reader market to the rest of the world. The company controls about 45 percent of e- reader sales in the U.S., followed by Sony Corp., which has a 30 percent share, according to ISuppli Corp., an El Segundo, California-based research company.

“We have always had customers in countries all over the world buying English-language books from us,” Chief Executive Officer Jeff Bezos said in an interview. “Now those customers can get English-language books in 60 seconds wirelessly, instead of waiting two or three weeks.”

The international Kindle has a 6-inch (15-centimeter) screen and looks identical to the entry-level U.S. version. It will download books via third-generation mobile-phone service from AT&T Inc. and its partners. Users can access more than 200,000 English-language books and more than 85 newspapers and magazines.

Electronic Library

Consumers in the U.K. and Canada will probably snap up the Kindle at a faster pace than U.S. customers did after its initial introduction, James Friedland, an analyst at Cowen & Co. LLC in New York, said in an interview. That’s because consumers in those countries are already aware of the product, he said.

“The next step is to get e-book distribution rights in languages other than English,” Friedland said. “That’s the market which currently offers an opportunity for competitors to move in.”

The U.S. Kindle store has more than 350,000 books. More than 75,000 titles have been added to the store in the past five months, Amazon.com said. Most Kindle best-sellers cost $9.99. Customers don’t pay wireless fees to download electronic books.

Sales of electronic titles are narrowing the gap with traditional books, said Bezos, 45. For every 100 printed copies of a title sold, Amazon.com sells 48 Kindle books -- assuming the book is available in both versions. That’s up from a rate of 35 digital books five months ago, he said.

IPhone Version

“People love reading Kindle books,” Bezos said. “It’s that simple. There are so many advantages over a paper book.”

Amazon.com offers two Kindles in the U.S. In addition to the basic model, there’s a larger version called the Kindle DX, which costs $489. It has a 9.7-inch display that’s designed for reading newspapers and textbooks. The company will introduce an international version of the DX next year, Bezos said.

The company faces growing competition in the market. IRex Technologies BV will sell an e-reader for $399 at Best Buy Co. by the end of the month. It plans to introduce a touch-screen version by the first half of next year. Another company, Plastic Logic Ltd., expects to release an e-reader next year.

“Vendors are jockeying for market position to meet demand, a very different situation from when the first wave of e-books hit the market,” Allen Weiner and Mike McGuire, analysts at market researcher Gartner Inc., wrote in a report last month. “At that time, vendors had to justify the product’s existence as much as anything else.”

Amazon.com has teams building Kindle applications that will work on a number of other devices, Bezos said. The Kindle has an application for Apple Inc.’s iPhone and iPod Touch.

Limit Size

Amazon.com will make $1.9 billion in annual revenue from the Kindle by 2012, said Sandeep Aggarwal, an analyst at Collins Stewart LLC in San Francisco. That’s up from about $300 million this year, he estimates. Amazon.com doesn’t disclose Kindle sales.

Electronic books are outpacing the book market as a whole. Digital book sales more than doubled to $61.2 million in the first half of the year, according to the Association of American Publishers in New York. Total book sales rose 1.8 percent during that time.

Even with consumers increasingly embracing electronic editions, the high price of e-readers may limit the size of the market, said Sarah Epps, an analyst at Cambridge, Massachusetts- based Forrester Research Inc. Amazon.com and Sony will have to drop the price of e-readers to about $50 if they want consumers to flock to the devices, she said in a report last month.

Epps estimates that about 3 million e-readers will be sold this year. The maximum number of U.S. consumers who would consider buying the devices at $199 -- the price of Sony’s cheapest version -- is 25 million, she said.

Amazon.com rose $3.06, or 3.4 percent, to $93.97 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 83 percent this year.

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net

Last Updated: October 7, 2009 16:20 EDT