Freescale Semiconductor says its next generation system-on-a-chip for electronic readers will provide better performance while helping to lower the retail price of the devices.

Freescale launched the i.MX508 applications processor on Monday, claiming the SoC provides twice the rendering performance of Freescale's previous e-reader processors. At the same time, the new product is less expensive and could lower the retail price of e-readers by $30, according to the company.

Freescale's processors are in some of the most popular e-readers, including Amazon's Kindle and Sony's Reader. The chip maker's latest product is less expensive than previous generations because it combines an ARM Cortex-A8 processor with the display controller from E Ink, the company that makes the black-and-white display used in most e-readers.

Combining the two technologies in the same SoC lowers the cost by as much as 50%, compared to display-related technology without the integration, Freescale says. In additon, the ARM processor, which runs at 800 MHz, is capable of powering e-readers with larger screens and improving the devices' responsiveness to commands, such as page turns.

"Working closely with E Ink and our customers, we are able to offer an integrated silicon solution to facilitate lower eReader retail prices and enable the next phase of growth in the eBook market," Bernd Lienhard, VP and general manager of Freescale’s Multimedia Applications Division, said in a statement.

Market researcher DisplaySearch predicts e-reader shipments this year will triple that of 2009 to more than 14 million units. However, the continued success of the devices will depend on prices falling substantially below the $260 base price of the market-leading Kindle.

That's because competition is heating up with the introduction of tablets, such as the Apple iPad scheduled for release at the end of the month, industry observers say. Tablets' color screens and multimedia functions make them far more versatile than e-readers, which have black-and-white displays that are unable to play video. However, e-readers could remain viable to avid readers, a sizable market, if the price is much lower than tablets.

Freescale plans to send samples of the i.MX508 to select customers early in the third quarter of this year. The device will cost less than $10 in quantities greater than 250,000 units.