Nut Shell Electronics, the e-reading subsidiary of Shanda, announced today to lower its Bambook e-reader’s price to RMB 499 (US$ 77), nearly 50% percent off the current RMB 999 (US$ 154) price tag.

Net Shell CEO Guo Zhaohui hopes to vitalize the e-reading market with affordable e-readers. He also disclosed that since its launch in last year, customers had an aggregate of over 10 million downloads through Bambook.

Screenshot of Bambook

It seems the e-reader vendor all felt the pressure of multi-purpose IPad and other tablet devices, Hanvon, a prominent e-reader and tablet brand in China, had already cut down several models to RMB 599 (US$ 92). Hanvon is the most recognizable e-reader brand in China in 2010, leading over Shanda’s Bambook (comes in fifth) and Amazon Kindle serials (comes in second), according to a research by ZOL, a Chinese IT hardware news portal belongs to CBSi China. Hanvon is reportedly in big loss under the attack of iPad and other tablets.

Newman and Aigo, two well-known Chinese electronic companies are also lowering down the price of their offerings.

`Market research firm iSuppli analyst Steven Mather once said that “sales of e-readers will fall short due to the growth in media tablets(including iPad and other tablet devices), Many users will use tablets as e-readers”, which is a gloom image for e-reader manufacturers. Globally, e-reader vendors profit margin also declined aggressively after Apple debut the first generation of iPad. And according to Zero2IPO Research Center, a market research and consulting firm in China, sales of e-readers in China dropped down to about 282.5 thousand in Q1 2011 from last Q4’s 305.1 thousand, a 7.41% fall.

Interestingly, according to a recent research by Pew Internet Project, e-reader sales surged since last Nov in the States, while sales of tablets grow at a slower pace.

Read the full report.

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