Amazon.com (Nasdaq: AMZN) has launched its next-generation of its popular Kindle e-book readers that starts as low as $139, as the U.S. online retail giant is trying desperately to maintain its market share against cheaper rivals and Apple's (Nasdaq: AAPL) iPad.

Two days before, Amazon's website tagged $189 Kindle with the note "Temporarily out of stock," fueling anticipation of a newer version.

In May, Bloomberg, citing anonymous sources, reported that customers could expect the next generation of the e-reader in August.

Amazon said Wednesday that it will sell its new Kindle Wi-Fi for $139, while the 3G version with built-in Wi-Fi will cost $189.

The 3G version, like its predecessors, offers free 3G wireless with no monthly fees or annual contracts.

"If you don't need the convenience of 3G wireless, we have an incredible new price point -- $139 for Kindle Wi-Fi. At this price point, many people are going to buy multiple units for the home and family," Jeff Bezos, Amazon.com's founder and CEO said in a statement.

Amazon said both devices weigh just over eigth ounces and pack a new six-inch screen with 50% better contrast than any other e-reader. Amazon also said the new devices offer 20% faster page turns, up to one month of battery life, and storage of up to 3,500 books.

The new versions also feature an enhanced PDF Reader with dictionary lookup and notes.

Amazon said it will ship the new devices to customers in over 140 countries and 30 territories beginning Aug. 27.

Amazon also sells a high-end e-reader called Kindle DX, which boasts a 9.7-inch screen at $379.

"Kindle is the best-selling product on Amazon for two years running. We lowered the price to $189 and sales growth tripled. Now, we are excited to introduce a new generation Kindle that is smaller, lighter, and faster, with 50% better contrast," Bezos said.

According to Amazon, its U.S. Kindle Store now has more than 630,000 books, including new releases and 109 of 111 New York Times best sellers.

Furthermore, over 1.8 million free, out-of-copyright, pre-1923 books are also available on Kindle.

Amazon.com, which sold more than three times as many Kindle books in the first half of 2010 over last year, is now selling more Kindle books than hardcover books.

Price war
Amazon has been slashing the price of its best-selling product at a fast pace, as rivals like Barnes & Noble (NYSE: BKS) and Sony (NYSE: SNE) offer cheaper versions.

Early July, Amazon cut the price of Kindle DX to $379 from $489, after slashing the price of its regular Kindle to $189 from $259 in June.

In June, hours after Barnes & Noble dropped the price of its Nook e-reader to $199, Amazon dropped the price of the Kindle to $189.

Barnes & Noble, the leading bookseller in the United States, offers a Wi-Fi version of its Nook e-reader for $149, and Sony offers the Reader Pocket Edition, which does not have Wi-Fi, for $150.

Interestingly, all these price wars has not softened demand for Apple's iPad, which starts as low as $499.

Though the iPad does much more than e-book readers, customers seem to be willing to pay much more for the iPad because it is an Apple product. Apple said last week it had already sold 3.27 million iPads.

Shares of Washington-based Amazon.com ended Wednesday's regular trading at $117.13 on Nasdaq.