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Barnes & Noble Aims to Take Down Kindle, by Hook or by Nook

By Renay San Miguel
Oct 21, 2009 4:00 AM PT

It doesn't matter whether Amazon's Kindle has 60 percent market share, or that Sony has its powerful brand backing its Reader. Barnes & Noble wants in on the nascent e-reader market.

Barnes & Noble Aims to Take Down Kindle, by Hook or by Nook

Barnes & Noble Nook e-reader
The Barnes & Noble
Nook e-reader
(click image to enlarge)

For reasons not apparent at press time, Barnes & Noble is calling its new electronic reading device the Nook, officially launching it during a late-afternoon Eastern time press event Tuesday in New York City. A Wednesday conference call was scheduled for media, but plenty of Nook information had already leaked out before the Tuesday afternoon event via a Gizmodo report last week, a Tuesday morning Wall Street Journal story -- and Barnes and Noble's own Web site, which went live with images and details about the Nook several hours prior to the press event.

Those details make it clear that the real-world bookseller, with more than 700 physical locations in the U.S. and an online store, is making a serious attempt to dethrone the Kindle as the early e-reader market leader. What's also clear is that the entire e-reader market is getting as crowded as the Stephen King section in a Barnes & Noble.

The Nook's Details

Starting at the end of November, the Nook will sell for US$259 -- same price as the domestic-only Kindle. Like Amazon's device, the Nook features instant wireless downloads of books, newspapers and magazines. The Nook will use AT&T's 3G network for its over-the-air downloads, similar to the Kindle's Whispernet service, which uses the Sprint network.

Both devices store about 1,500 books and are about eight inches long and five inches wide. Both take advantage of a wide selection of books available for download -- Amazon touts 350,000 books, while B&N says it will have "1 million" choices, but appears to be including newspapers and magazines in that number.

The similarities end there. Barnes & Noble has added a color touchscreen section to the bottom portion of the device's face. Most of the upper portion supports 16-level grayscale e-ink, but the 3.5 inch touchscreen section enables navigation, browsing and flipping through book cover art.

Another key difference: the LendMe technology that allows users to lend the books they've downloaded to anyone else who is using another Nook, or is using Barnes and Noble's e-reader software on a smartphone, PC or Mac. The "borrowed" books disappear after 14 days. The Nook can also access Barnes & Noble WiFi hotspots in stores for downloads and browsing.

"They definitely did not want to come out with a Kindle clone," Frost and Sullivan digital media analyst Mukul Krishna told TechNewsWorld. "They have added something with the multi-touch color display and sharing books -- that is all good. And they kept the price point at a level that gives them some wiggle room during the holiday season, when they are trying to grab market share."

Hurdling the Kindle

"Barnes & Noble is playing catch-up here," said Forrester Research analyst Sarah Rotman Epps, who pegs Kindle's share of the market at 60 percent. "Everyone has been waiting for them to make a move."

Indeed, B&N has spent most of 2009 making various acquisitions and building the foundation for an e-book business. "So to make up for lost time, B&N is offering a device with more features at the same price as a Kindle. They really do see Amazon as their competition," despite the Sony Reader and forthcoming devices from other manufacturers.

However, the consumer's willingness to give up the smell and feel of hardcovers and trade paperbacks remains the biggest obstacle, Rotman Epps added. "It's certainly an attractive product for the price. Consumers have a lot of curiosity about the devices, but a lot of uncertainty. Our research shows 40 percent have heard of but never seen an e-reader device. There's a lot of education to be done before consumers are fully swayed to buy one," Rotman Epps told TechNewsWorld.

An August research report from NPD also highlights the difficulties Amazon, Sony and now Barnes & Noble will face with book lovers. Consumers like the idea of instant downloads and being able to stuff a lot of reading material into a single device, wrote Ross Rubin, NPD director of industry analysis. However, they still love the idea of holding a book in their hands. "Today's e-reader offerings are delivering capabilities that are in demand by consumers," Rubin wrote. "However, some features that could enhance the appeal of more popular content, such as color, remain on the drawing board. Consumers may overlook their attachment to a book's tactile attributes, particularly for reading materials where timeliness and convenience takes precedence over leisure."

Reading the Competitive Landscape

While the Nook does have some color screen functionality, it's unclear whether it will be enough to engage users that are already seeing bright shades on their iPhones or iPod touches. Those devices are also a part of the e-reader competitive landcape, not just Amazon's and Sony's products, Krishna said.

"They're not only fighting for consumers against the Kindle and other e-readers, they're fighting for dollars that people have saved up for various other consumer electronics items, including gaming consoles and portable media players," Krishna explained. "It will be interesting to see how these companies will market these devices, because it's been an older demographic of late" that's been buying e-readers, he added.

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