Amazon unveiled its latest Kindle e-reader this week, an updated Paperwhite with improved front-screen lighting, greater contrast, more responsive touch panel and faster processor. Software updates will include integration of book recommendation site Goodreads, which the company purchased earlier this year. The new device is available for preorder for $119 — or $139 without ads — and will ship later this month. The $189 3G version will be released on November 5th. The online retailer also announced a program for buying discounted e-books.

“Amazon faces a challenge in attracting new e-reader customers — or convincing existing ones to upgrade — as the market for the dedicated devices dwindles in favor of tablet computers,” reports The Wall Street Journal. “The market for e-readers peaked two years ago with 26 million sold worldwide, and dropped to 17.8 million last year, said Tom Mainelli, an IDC analyst. This year, he projects it will drop to 13.3 million.”

Regardless, Amazon currently dominates e-readers with 42 percent of the market in the first quarter. Its nearest competitor Sony has 6.3 percent of the market, and Nook maker Barnes & Noble has been struggling.

Amazon has reportedly been working on a dedicated e-reader with a color screen, but has run into challenges regarding poor color quality and battery life.

“The Kindle Paperwhite is the first introduction in what is expected to be a busy month for devices, including new handsets from Apple Inc. and a tablet from Samsung,” notes WSJ. “Amazon itself is working on refreshed versions of its Kindle Fire tablet, according to people familiar with the matter.”

In related news, Amazon has announced its new MatchBook program that allows its customers to purchase discounted digital versions of certain printed books that they have already purchased from the Amazon store. As long as publishers have signed on, Amazon customers can buy the e-books for $2.99 or less. Launching in October, about 10,000 titles will initially be available as part of the service.

“The new program echoes a similar one the company announced earlier this year offering users digital versions of CDs they’d bought on Amazon,” reports WSJ. “In that case, however, Amazon gave away the digital versions free.”

“Somewhat similar to the movie industry’s attempt to package a digital copy of a film with a Blu-ray purchase, this is an interesting marketing tactic that allows book consumers to transition to a Kindle and replace their book collection with digital copies for a lower price,” adds Digital Trends.