Barnes and Noble Debuts Nook E-Reader in Challenge to Amazon

Barnes & Noble announced a new e-reader, the Nook, that it hopes will be a strong competitor to's Kindle line. The e-reader field has become increasingly crowded in recent months, with new offerings from giants such as running alongside other announced devices from smaller IT startups.

NEW YORK CITY-Barnes & Noble has joined the increasingly crowded e-reader field with the Nook, a device it doubtlessly hopes will take market share away from's Kindle line.

Barnes & Noble executives including CEO Steve Riggio took the stage at Chelsea Piers on the Hudson River here to show off the e-reader, which features a Google Android operating system, as well as a 6-inch e-ink display paired with a second multitouch display for navigation and book purchasing.

Flicking the finger along that color touch screen allows users to navigate through a book catalog, buy a book with two finger taps and type search terms on a virtual keyboard. When not in use, the color display goes dark, so the reader can focus on the e-ink display. The Nook has the memory capacity to carry around 1,500 e-books, as well as 3G wireless downloading provided by AT&T.

"LendMe" technology allows books to be shared Nook-to-Nook. A virtual bookmark feature lets users instantly return to their stopping point in an e-book; the bookmark is transferable between devices, allowing the reader to return to the same spot in the text even if she switches from the Nook to an iPhone.

Designers such as Jack Spade are providing accessories such as book covers. The Nook will be priced at $259 and go on sale at the end of November.

"The Internet is changing things," Riggio said after taking the stage to the tune of Coldplay's "Life in Technicolor." Riggio said the book industry is still larger than the music business and ripe for innovation. "Our customers want e-books, and this for us represents a multibillion-dollar opportunity."

Barnes & Noble's strategy to differentiate itself from's Kindle line seems to progress along two lines: let e-books from its online store be portable not only to its proprietary device, but also the iPhone and other devices. The other part is using its brick-and-mortar locations to promote the Nook and the company's online store.

"When it comes to new devices, we know that consumers want to touch and learn about them before they buy," William Lynch, president of Barnes & Noble's online site, told the audience. "We have a great opportunity to share Nook with our tens of thousands of customers." As the backdrop of the stage opened behind him to reveal a Nook in-store display, he added: "Nook will be sold in all Barnes & Noble stores this holiday season."

The requisite celebrity appearance was provided by "The Tipping Point" author Malcolm Gladwell, who drifted across the stage for 15 seconds to read a passage from that book before disappearing back into the audience.

Barnes & Noble launched its eBookstore in July. That online storefront features some 700,000 books and 500,000 free public-domain volumes from Google. It has also released a book-downloading app for the iPhone and iPod.

Barnes & Noble's device had been frequently rumored over the past few weeks, with photos and information about the device surfacing on tech blog Gizmodo.

Barnes & Noble's decision to host its announcement in New York City could be interpreted either as an acknowledgment of the metropolis's front-and-center place in the publishing world or else as a deliberate swipe at, which hosted its launch events for the Kindle 2 and the Kindle DX at prominent landmarks here. Those events, in addition to featuring CEO Jeff Bezos demonstrating each device, included the rollout of prominent literary celebrities such as horror maestro Stephen King.

Click here for images of Stephen King helping launch the Kindle 2.

The market for e-readers remains relatively small, with Forrester Research predicting U.S. sales of around 3 million units in 2009. That number will rise, but unless the pricing for the units decreases rapidly, some analysts feel that e-readers will never reach the generalized penetration rates currently enjoyed by MP3 players and other handheld media devices.

"The cost of the display component is high and sales volumes are still modest, yet consumers demand and expect ever-lower prices," Sarah Rotman Epps, an analyst with Forrester, wrote in a Sept. 1 research report. "The bottom line: E-reader product strategists will have to educate consumers and innovate to bring prices down. Even if they are entirely successful at both of these feats, e-readers will never be mass-market devices like MP3 players."

The increased competition, though, may already be bringing those prices down. On Oct. 7, slashed prices for the original Kindle device, with a version of the e-reader that can wirelessly download material from the United States and 100 other countries now retailing for $279; a U.S.-downloads-only version sells for $259.'s international customers can access some 200,000 English-language books in addition to more than 85 U.S. and international magazines and newspapers. The online retailer has been aggressive about partnering with traditional media outlets to extend their periodicals into the e-reader space.

International downloading for the Kindle will be hosted by AT&T. Previous versions of the Kindle, such as the Kindle 2 and the 9.7-inch-screen Kindle DX, will continue to have their downloading provided by Sprint.

Bezos has previously indicated that Kindle-related sales bring in 35 percent of Amazon's book-related revenue, although he has declined to break down how much of that comes from device sales as opposed to actual e-books.

In addition to the price cut, news from other companies in the space all but guaranteed a great deal of media attention has been focused on e-readers over the past week.

On Oct. 17, Google announced that it plans on rolling out Google Editions, an online bookstore, in 2010. Google Editions will include 500,000 e-books, which can then be downloaded onto any device with a Web browser, including PCs, smartphones and laptops. Analysts question, however, how much impact Google's move will have within the dedicated e-reader ecosystem.

On Oct. 19, Plastic Logic announced that its upcoming e-reader will be named QUE, and confirmed that it will be focused squarely at the SMB (small to medium-sized business) and enterprise markets. Among the business-traveler-friendly functionality is the QUE's supposed ability to download and display Microsoft Word, PowerPoint and PDF documents. The device will utilize both Wi-Fi and AT&T's 3G network for wireless downloading.

The QUE will measure 8.5 by 11 inches, with a thickness of a third of an inch. None of the press images associated with the announcement included shots of the QUE's front, making it hard to estimate the size of the actual screen.

"We're particularly excited about the QUE," William Lynch said, reconfirming that Barnes & Noble's eBookstore will run on the device.