Some predict Apple's iPad will eat up the entire e-reader market, but it may not be too late for Amazon or Sony. These e-reader makers could get a competitive edge by offering a much cheaper device and a new technological development could make this happen.

A new chip by Freescale Semiconductor Inc. could help reduce the price of e-readers to less than $150 this year, according to Bloomberg.

Glen Burchers, a marketing director for the formerly Motorola-run company, said Freescale will begin to offer samples of a new processor that takes on the functions of other chips and reduces e-reader costs.
Freescale's processor could not only take up the function of the display chip, reducing the time it takes to turn a page on the e-reader from two seconds to half a second, but could also drive the cost of these devices down.

Amazon, the reigning king of the e-reader market, currently uses Freescale's technology in its Kindle device. While Amazon's most modest e-reader sells for $259, the company's most deluxe e-reader has a pricey $489 price tag. Sony Corp.'s e-reader, which also utilizes Freescale's chips, retails for almost $200.

With e-reader sales expected to double this year, the incorporation of a new chip in both Amazon and Sony's e-reader technology could drive prices down and give Apple's $699 iPad some stiff competition.

Burchers told Bloomberg that the most important factor in the e-reader market is price, and added that his company sees "the price of e- readers coming down this year, and Freescale is trying to facilitate that. That's a lot of what this chip is doing." No details on if or when the companies will adopt the technology were given.

The news of a faster and cheaper chip only seem to fuel speculation that Amazon is gearing up to build a new Superkindle, as the NYT's Tech Bits Blog said last month. In February, Amazon bought a New York-based touch screen technology company, Touchco, adding to speculation that it was getting ready to put up a good fight against Apple's e-reader. In January, Amazon also announced the it was letting programmers create 'active content' - very much like the iPhone's applications - for the Kindle. The online retailer and e-reader maker said it was letting creators keep 70 percent of the revenue from each sale as well, a generous move that contrasts with Amazon's old strategy and anticipates the arrival of the iPad. The Kindle's struggle to stay relevant may also lead to a more beneficial agreement between Amazon and newspapers, who receive only 30 percent of subscriptions.

This innovative touch screen technology, paired up with a faster and economical chip, could give the slow-to-load, black and white Kindle a much-needed makeover. A makeover that it desperately needs to compete with the soon-to-be released, slick and modern iPad.

Sources: Bloomberg, NYT Tech Bits Blog