CORRECTED - UPDATE 2-Amazon cuts Kindle price to $299

(Corrects stock exchange to Nasdaq in last sentence, also
applies to AMAZON/KINDLE UPDATE 1)

* New price tag is $60 less

* Recently shipped Kindles to receive price credit

(Adds background, detail, byline)

By Alexandria Sage

SAN FRANCISCO, July 8 (Reuters) - Online retailer
Amazon.com (AMZN.O) has cut the price of its standard Kindle
electronic reader by 17 percent to $299, the company said on
Wednesday, the latest salvo in the war for digital readers.

The price cut comes amid a budding digital book battle
where rivals like Amazon, Sony Corp (6758.T) (SNE.N) and a host
of smaller companies are anxious to get in on the ground floor
of what some say is the future of reading.

Amazon said customers who had ordered Kindles that had
shipped within the past 30 days would receive a $60 credit on
the price difference.

Electronic readers allow consumers to read books, magazines
or newspapers on a tablet that downloads content digitally.
While the devices are convenient for those who travel, their
high prices have been a barrier to many.

In February, the Seattle-based retailer unveiled the second
version of its digital book reader priced at $359. The first,
which carried the same price tag, came out in November 2007
amid much fanfare.

Amazon has pointed to the Kindle as a growth driver and
said its sales have surpassed expectations, without disclosing
sales or profit data.

A spokeswoman said Amazon was able to cut the price of the
Kindle as higher volume had reduced manufacturing costs.

In May, the company introduced a larger version the Kindle
DX, designed to better view newspapers and magazines that
remains at $489.

The new $299 price tag on the Kindle puts Amazon's device
more in line with competitors' pricing. While earlier Sony
e-readers retailed for $399, the cost of more recent versions
have been cut to $299 and $279, according to Sony's consumer
website.

Still other devices entering the market are cheaper, such
as the $249 Cool-er from Interead.

Amazon shares rose $1.73, or 2.3 percent, to close at
$77.36 on Wednesday on the Nasdaq.
(Reporting by Alexandria Sage; Additional reporting by Brad
Dorfman; Editing by Richard Chang, Leslie Gevirtz)