Amazon Kindle 3G with Ads Aims to Blunt New Grayscale Nook

By Nicholas Kolakowski  |  Posted 2011-05-25 Print this article Print

Amazon launched a cheaper Kindle 3G with advertising support, in an apparent bid to blunt the impact of Barnes & Noble's new touch-screen Nook e-reader.

Well, that didn't take long: On the same day that Barnes & Noble unveiled an updated Nook e-reader, Amazon issued an advertising-supported Kindle 3G at a conspicuously low price.

The "Kindle 3G with Special Offers" retails for $164 and features display advertisements from companies such as Buick and Visa. It follows on the heels of a WiFi-only, ad-supported Kindle that retails for $114, and which Amazon claims is the bestselling electronic device in its repertoire. The regular, no-advertisements Kindle retails for $139, and the Kindle 3G for $189.

Even as Barnes & Noble seemed to focus increasingly on full-color e-reading, with its Nook Color, Amazon continued to issue updates to its grayscale Kindle's capabilities. On April 20, the company announced a Kindle Library Lending feature, due later in 2011, which will allow readers to borrow Kindle e-books from more than 11,000 libraries in the United States.

However, Barnes & Noble hadn't abandoned its own grayscale efforts entirely. On May 24, the company issued a revamped Nook navigable via touch screen. In addition to a 6-inch display, the new Nook weighs less than eight ounces, and Barnes & Noble claims the battery will last more than two months on a single charge. It retails for $139, with shipping slated to begin June 10.

That contrasts heavily with the Nook Color, which retails for $249 and features access to 125 apps, enhanced audio and video for certain titles, and a social-networking app that lets readers swap books and recommendations. It also includes some decidedly tablet-like features, including support for Adobe Flash Player and a single in-box for Web-based email.

"Barnes & Noble is not targeting Apple with this device. Instead, it's targeting Amazon, trying to undermine today's black-and-white Kindle as well as tomorrow's color Kindle tablet," James McQuivey, an analyst with Forrester, wrote in an April 25 blog posting about the Nook Color. "Barnes & Noble may have to come to market with is original e-ink Nook second, but its Nook Color upgrade gives it the upper hand in the war over the serious reader."

But it'd been an open secret that Barnes & Noble intended to roll out another device: The company's May 4 filing with the Securities and Exchange Commission indicated that "a new eReader device" would be launched May 24. That not only unleashed rampant speculation among bloggers about Barnes & Noble's plans, but also doubtlessly gave Amazon a little bit of time to prepare a response timed for that date.

Despite the convenience of e-readers, some analysts see the format as potentially devastating to the publishing industry in the long term.

"The book publishing industry has entered a period of long-term decline because of the rising sales of e-book readers," read an April 28 research note from IHS iSuppli, which predicted a decrease in book revenue at a compound annual rate of 3 percent through 2014-a reversal from the period between 2005 and 2010, when revenue rose.

That note quoted IHS iSuppli analyst Steve Mather as saying: "The [publishing] industry has entered a phase of disruption that will be as significant as the major changes impacting the music and movie business." 

Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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