The e-reader wars have begun in earnest (well, in the US anyway) as some of the biggest selling devices in the market went beneath the $200 mark. Amazon’s Kindle and the Nook from US book giant, Barnes & Noble have both dropped prices significantly, with the former falling by a huge $70 to $189 (€154). Barnes & Noble meanwhile lowered the price on its 3G compatible Nook to $199 (€162) from $259 (€211).

A Reuters report notes that shares in both companies fell about 3% as investors feared intense competition (hello iPad) could lure away buyers of e-books. Profit margins on Barnes & Noble’s Nook and Amazon’s Kindle are estimated by analysts to be relatively modest, but the devices are important to attracting book buyers.

In a research note in April, Goldman Sachs forecast that US sales of e-books would rise by 47% per year to reach $3.2 billion by 2015, or 12.8% of total book sales, up from 3% this year. Goldman forecast physical book sales to slip 1% per year over that period.

Goldman also forecast that Apple’s share of the e-book market would jump to 33% in 2015 from 10% this year, while Amazon’s market share would plummet to 28% from 50%. Barnes & Noble is expected to snag 15% of US e-book sales in five years, up from 5% in 2010.

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. Indeed, Charles Wolf, an analyst with Needham and Co, said e-readers – despite being “primitive” when compared with the likes of the iPad – will keep a core audience.

The first version of the Kindle sold for $399 in November 2007 when it was launched. Here’s hoping that the price war hits the Sony Pocket e-Reader and e-Reader Touch as well, both of which are popular with Irish buyers.