Nook Color's Improvements Threaten Amazon Kindle, Sony

Barnes & Noble's Nook Color, with its new tabletlike features, is less a threat to the Apple iPad than the Amazon Kindle and other e-readers, suggest analysts.

Barnes & Noble's Nook Color now boasts some tabletlike features: an integrated email app, support for Adobe Flash Player and access to apps like Angry Birds. Does that make the device more of a challenge to Amazon's Kindle, or to the flood of Android-based tablets hitting the market?

The new features include access to 125 apps, enhanced audio and video for certain titles, improved magazine navigation, and a social-networking app that lets readers swap books and recommendations. What takes the Nook Color from e-reader territory to the border of the Land of Tablets, however, is the app that consolidates Web-based email into a single in-box, and support for Adobe Flash Player. Barnes & Noble plans on making the update (officially known as Version 1.2.0) available over the next week as an automatic download.

The Nook Color retails for $249, far cheaper than many tablet PCs currently on the market. That could draw serious readers who want the ability to check email and maybe play a few games. However, even a multipurpose Nook doesn't fit in the current tablet trend, at least according to one analyst.

"The range of competitors coming in after the iPad's territory [is] coming in at higher prices with more powerful features," James McQuivey, an analyst with Forrester, wrote in an April 25 corporate blog posting. "The tablet market is gradually moving into higher-power features, not lower-power experiences."

That makes other e-readers the Nook's primary competition, as opposed to tablet PCs.

"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," McQuivey wrote. "Barnes & Noble may have come to market with its original e-ink Nook second, but its Nook Color upgrade gives it the upper hand in the war over the serious reader."

Months ago, tech enthusiasts figured out how to "root" the Nook, transforming it in the process into a full Android tablet. News sources ranging from Ars Technica to The Wall Street Journal soon picked up on the story, which may have driven Barnes & Noble-even if it hadn't already been thinking of ways to better compete with the Kindle-to take official steps to broaden its e-reader's capabilities.

The Nook's new features "strengthens its position in that space," Allen Weiner, a research vice president for Gartner, wrote in an April 25 research note, "and offers enough gaming, entertainment and productivity apps to keep consumers not so much from buying an iPad, but more from buying whatever Amazon or Sony might come up with for readers -who want more.'"

For the moment, Amazon seems focused on enhancing the Kindle's reading capabilities. On April 20, the company announced a Kindle Library Lending feature, due later in 2011, which will allow readers to borrow Kindle ebooks from more than 11,000 libraries in the United States. Amazon is also seeking to broaden Kindle adoption with an ad-supported device that retails for $114, slightly cheaper than the basic Kindle at $139 and the Kindle 3G at $189.

The Kindle's competition includes not only the Nook, but also the iPad and other tablets with e-reader software. Amazon has tried to blunt the latter's competitive momentum via a series of Kindle-branded e-reader apps for tablets, smartphones and PCs. With tablets continuing to gain popularity, though, and devices like the Nook Color hitting store shelves, chances are good the company is considering a massive upgrade to the Kindle-if not an Android-based device of its very own.