Nor was Amazon about to let B&N take mindshare control in to so-called “reader tablet” market with its $249 Nook Color which features a version of Android as well as enhanced content from publishers and a variety of apps. At the same time, Amazon needed to face pending efforts in the color reader tablet space from Kobo and Sony—a lethargic but potentially dangerous competitor—in this arena.

Amazon’s frontal assault on its e-reader competitors is on price, undercutting the current market by about $40 for its new touch version and $60 for the new non-touch version. In addition, Amazon is offering a 3G model for $149 which is within $20 of its competitors’ WiFi only e-ink readers. As Gartner has predicted, the price point for e-ink readers would fall below $100 in time for the holiday shopping season. What remains to be seen is whether Amazon will be alone in that distinction or whether B&N, Kobo and Sony—whose new Pearl screen, WiFi device has yet to hit the market—will follow suit. The thinking is price cuts will be fairly dramatic market wide in Q4 along with perhaps some innovative campaigns which include product or service bundles.

This is not a straightforward Amazon vs. the market event; the dynamics are complicated. Amazon’s new lower-priced e-readers could thwart B&N’s efforts in non-U.S. markets. B&N only offers Nooks domestically but has talked about global distribution; Amazon’s ability to sell internationally a popular device at a low cost could keep B&N from becoming a global player. Such a move would challenge Kobo which has set up a number of intentional distribution agreements as well as put a major dent in any plans Sony—a global player—would have in this market.

The $199 Kindle Fire initially would attempt to undercut B&N’s Color Nook in price and functionality. The Fire would not only be ideal for enhanced books (books with audio and video) but also offer streaming media services, something the Nook Color does not offer. And while a 7-inch tablet is not an ideal screen size for newspaper and magazine publishers, Amazon might offer some ways to render such content better than the Nook Color and become an initial volley in a longer-term newspaper/magazine strategy which fully blossoms when Amazon releases a 10-inch tablet. Amazon will not have to make a big effort to be more newspaper and magazine friendly than Apple has been regarding in-app purchases and sharing consumer data.

Amazon’s double tap has the impact of targeting its e-reader competition today and the media tablet market as a magazine and newspaper device in short order. Holiday shoppers will have a cornucopia of digital media devices to select from this year. Amazon’s hope is it sits under more trees at home and abroad than any of its competitors.

First, Amazon: The Seattle-based company is likely to come out with some sort of tablet device which no doubt will be color, and support both support web browser and video. It will be touch screen because in Feb. 2010 Amazon bought Touchco, a company specializing in touch screen design. It will support Android, but like Barnes and Noble, it will have its own implementation of the OS for its devices and sell resulting apps in its marketplace. A new device for Amazon makes sense given its vast products and services in the publishing and entertainment sectors.

A new tablet device for Amazon mostly threatens Apple’s role in the publishing space. Amazon has more publisher relationships, a larger global publishing footprint, a self publishing unit, and exclusive deals with some high profile authors and book buying data from millions of shoppers. Amazon’s role in the newspaper and magazine industries are a bit more opaque; the company delivers text versions of both media but could be positioned to quickly upgrade those relationships.
A new media tablet from Amazon threatens Google’s position as an embryonic e-book force (does it force Google to go the device route?) and perhaps even Netflix. Amazon’s streaming movie services will greatly benefit from being baked into a branded device. And tuck this into your pocket: if Amazon’s new device has a built in camera, imagine the bar code/NFC shopping apps that could be part of the device’s core features. Here’s a scenario: you are in Wal-Mart, find a HDTV you want to buy; you snap a picture of the device or scan the barcode and Amazon will give you comparison price and allow you to buy it from them in One Click.

As for Barnes and Noble, in a meeting with investor analysts on May 4, “Barnes & Noble, Inc. … indicated it expects to make an announcement on May 24, 2011 regarding the launch of a new eReader device,” Barnes & Noble said in a filing with the Securities and Exchange Commission. With a recent upgrade to Android 2.2 on its Nook Color, what could be in store?
Here’s a SWAG with some degree of logic: Barnes and Noble might be the first to come out with a device using the Mirasol screen technology from Qualcomm. Qualcomm said earlier this year that it would have a device in the marketplace in 2011. A Mirasol device, which uses Interferometric Modulator (IMOD) element is a simple MEMS (micro-electro-mechanical system) device that is composed of two conductive plates. The net result is color which uses less power in a non-reflective display. In short, a color screen which supports browser and video with an e-paper like “easy on the eyes” experience. A Mirasol device could be positioned between the Nook Color and the Nook B&W (call it the E-Nook?) and offer the reading experience of the black and white with the ability to offer enhanced books and magazines. Pricing? Good question.

Amazon and Barnes and Noble’s new device plans raise the issue of the fate of its existing black and white line of e-readers. Two things make sense: one is that the price drops to around the $50 mark and is marketed to those whose only aim is to read trade fiction and the like (perhaps an older demographic). Second, is they are given away by book publishers to customers who sign up for book clubs that carry a monthly purchase commitment. (Bertelsmann, take note).

The e-reading space is one in which speculation has become a blood sport. Microsoft, Sony and other consumer electronics companies will be watching this space. If my speculation is on the money, see you at the race track.

So, what new in the Froyo upgrade? There’s now an app marketplace with Android-based apps built for the Nook Color using a Nook SDK. Apps, which predominantly sell for $2.99 or less, run the gamut from games (Angry Birds) to Pandora internet radio. There is also email with seamless account setup for most popular POP-based email accounts (Yahoo, Hotmail, Gmail). The device now will support Flash which means it will play Flash video and audio. On the deficit side, it lacks Bluetooth, has tiny audio quality through small speakers in the back of the unit and while it plays Flash, a great deal of Web video is not optimized for mobile.. The experience can be hit and miss: on The New York Times site, video worked well; on Hulu, not so great.

The best things about the new and improved Nook Color are all reading related. After all, isn’t this “the reader’s tablet”? The Nook Color is a strong device for kids’ books with more than 350 kids’ digital picture books which take advantage of the new Froyo features such as video and embedded games. Nook Color V1.2 (as it’s called) does a nice job of handling the emerging category of enhanced books which incorporate video, audio and interactive social features. B&N says it has 225 (and counting) multimedia books including “Knitting for Dummies,” Raising a Child” and Elle: Workout Yoga starring Brooklyn Decker.
Nook Color V 1.2 might provide some help for the Nook Newsstand. I am among those who believe replica or enhanced versions of existing print pages not only don’t work on a tablet device, they look especially weak on a seven-inch screen. At launch, the upgraded device will have the Pulse “social magazine” app which hopefully will encourage newspaper and magazine publishers to build apps that look less like copes of their print products and more like Pulse and Flipboard.
Saving one of the better features for last, there’s a beta version of Nook Friends, a social application that shows great promise for sharing, recommending and buying books in one integrated site. The site also makes the “Lend Me” feature for sharing B&N titles much simpler. There are really good sites to share what you are reading and some where you can compare what you are reading to various parts of the social graph, but none that combines those two elements with the ability to buy a digital copy once you’ve discovered a new title.

It’s a bit hazy to gauge the impact of the Nook Color V1.2 in the e-book marketplace/e-reader landscape. While it might seem logical for Amazon or Kobo to build an app for the new Nook Color app marketplace (as they have for other marketplaces), none is in the offing, says B&N and neither Amazon nor Kobo has requested a developer’s kit . The same goes for digital magazine marketplaces such as Zinio. Will B&N keep them out of their marketplace? Better yet, can B&N keep them out of their marketplace?

So, bottom line, is the Nook Color a tablet? Well, it always was a tablet—a reader’s tablet—which is a device whose form factor and functions facilitate an enjoyable reading experience across books, newspapers and magazines. Now, it strengthens its position in that space 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.”
The Nook Color with its new Froyo upgrade is not an iPad—not even close. But those who are looking for a great cross-media reading device with some nice new multimedia bells and whistles, it remains a go-to device.

1. Adobe unveiled the Digital Publishing Suite at MAX, its annual worldwide developer/industry conference. The product/service, built on Adobe Creative Suite and Adobe InDesign CS5, adds cross platform distribution for magazine publishers as well as a hosted service that facilitates a new work flow/collaboration scheme for resource-constrained publishers.
2. As reported in my blog post on Oct. 27: Barnes & Noble, the nation’s largest physical book retailer, is following up its November 2009 release of the Nook, an e-ink e-reader, with the NOOKcolor, a device that uses a 7-inch LCD/LED screen to display books, newspapers, magazines and a few additional services such as Pandora. The device is scheduled to be available on November 19th and will retail for $249. NOOKcolor uses WiFi to harvest content. It will be built on the Android 2.1 platform which means it will not be able to run Flash, but as the device’s OS is updated, Flash support is likely. The device will not have access to the Android Marketplace at launch. NOOKcolor will support Adobe’s DRM which means it’s likely to continue to allow download of e-books from public libraries.
3. Even before Windows 7 Phone has hit the mass market, Amazon has announced a Kindle App for the smart phone, giving it yet another platform for readers who purchase e-boos from Amazon.

I couple these formal announcements with two key take-aways from panels I moderated at MAX.

1. Magazines are still in their earliest days of understanding the digital opportunity as it relates to reading devices such as the iPad. Two fatal flaws that seem to be a common occurrence are taking published magazine content and created what I’d call “enhanced replicas.” Some are even proud that there’s minor incremental content cost by re-purposing print content for the tablet.
2. The more erudite book design world agrees that interactivity for the sake of interactivity is lost on most consumers as it only causes confusion. Publishers view interactivity as a “bright shiny object” (my words) and have yet to find its proper place in their respective internal hype cycles.
Piecing together these data points, consider the following:

1. Magazines may have a powerful trajectory ahead, but liftoff will not take place until they redefine the term periodical (why publish weekly when new efficiencies allows you to publish in real time if need be) as well as view the digital channel and device capability as a new publishing paradigm as opposed to a channel for somewhat dressed-up recycled. It will be a pity if publishers don’t view services such as Adobe’s hosted publishing suite as a mean to build collaborative efforts with new visionaries.
2. Magazines cannot get by much longer by ignoring or stating that the lack of advertising solutions for new digital channels is “uncharted.” It’s understandable that warring stakeholders in the device world stand in the way of scalable open solutions, but it’s time for publishers to demand open platforms to capitalize on bringing new, measurable ad experiences to the tablet and other similar devices.
3. Being a Libra gives me the excuse of looking at multiple sides of any issue. I now believe Amazon may not rush into the tablet market because it believes the digital magazine and newspaper opportunity isn’t close enough to build a hardware solution for an unproven market. As the world’s largest bookseller, why not continue to do what you do best.

William Lynch, Barnes & Noble CEO calls the NOOKcolor “a reader’s tablet,” and from advanced word, he appears to have nailed it. From its description, the device aims for all three reading segments: book, newspapers and magazines. It adds periodicals to the mix by offering color and browser support and overcomes the tablet-reading shortcoming of excessive glare. As Martha Stewart said at Adobe Max, reading Martha Stewart Living on the iPad is great on an airplane “when they dim the lights.” Lynch says B&N has invested in screen technology that reduces device glare.

Other notable features is 8GB of onboard memory and a built-in social experience that extends B&N’s booking lending capabilities to a richer platform that integrates with popular social networks. This comes at a time when the publishing industry is intently focused on social commerce—the role of book recommendation’s from one’s social graph leading to transactions. Nook Color will also offer Quickoffice, a mobile productivity suite. It will not support e-mail clients but obviously will allow consumers to utilize webmail services.

B&N is also offering a Nook Developer SDK with the intent of inspiring developers to create enhanced book application such as adding video to cookbooks and travel books. Enhanced books, to date, has been an elusive, poorly defined category for publishers hoping to bring to market differentiated reading experience for which they can charge a premium. An area of low-hanging fruit for value add is children’s books, to wit B&N is launching Nook Kids, a platform aimed at facilitating value-added features of children’s books such as animation, “read to me” applications and games.

Many, myself included, questioned a retailer’s entry into the e-reading device scrum believing it would not have the technology chops to build and stay ahead of the digital reading device space. Not only is the Nook one of the best (if not the best) e-ink devices on the market, by expanding its offering to include a tablet reader with broader publishing distribution opportunities, Barnes & Noble may have elevated themselves to the head of the class. The NOOKcolor, based on its specs, offers the color and rich flexibility of a tablet blended with the reading experience of the gen one e-ink readers. Let’s not forget that B&N operates a large number of college bookstore as well as Nook Study, a platform for e-textbook reading which could make the Nook Color the go-to device for e-textbooks

So what’s the market impact? I would say that Apple’s iPad suffers a blow as a digital publishing distributor competing head-to-head with a tablet reading device from a major bookseller. Apple has not exactly endeared themselves to publishers with its lack of Flash support (although NOOKcolor won’t support Flash at launch) as well as its policy of not sharing consumer data with publishers and its reported entry price to be part of the iAds program.

The newer tablets en route such as the Samsung Galaxy and Blackberry Playbook will be scrambling to capitalize on their publishing opportunities and the Kindle…well… Amazon’s not saying but it’s safe to say, the company has something up its sleeve and the smart money is on a color tablet device. When? What will be the cool features? Amazon may know, but mums the word

To be fair, Kindle has a large number of public domain books it has wrapped in  its proprietary .azw DRM, but again we’re talking walled garden.

Here’s what I like about the Nook:

Freedom to buy books from multiple sources as well as read library books: The book I downloaded from my public library (in secure PDF) was easily transferred to the Nook using Adobe Digital Edition software. When connected to your PC via USB, the Nook shows up as a device in the software, and from there, it’s a simple drag and drop to the device.

The Daily: The first tab on the color-screen menu is called “The Daily,” a nice little what’s new page with some sort easy and commentary from such authors as Dave Barry and Steve King. This is just one of the little surprises that give the Nook its personality.

The ability to loan books: with The Nook, readers can loan anyone with either Nook or Barnes & Noble software on their desktop or smartphone, a book for 14 days. Not all books can be loaned (the titles are chosen by publishers) and one book cannot be lent to the same person twice. When a book is lent, it will show up in the recipients’ “the daily” section.

The mutlichannel experience: While not in place yet, bringing your Nook into a Barnes & Noble store should result in a few surprises. The Nook will automatically connect to B&N’s free AT&T wireless and present special book offers as well as other in-store special (i.e., free coffee at the B&N coffee bar).

The navigation buttons: In this case, I am referring to the page turning buttons alongside the e-reading window. They are nicely recessed and have small raised bumps to allow you to push without looking directly at the buttons.

Here’s what I am still pondering about the Nook

The color screen: At first, I found the color screen distracting because it interfered with the reading experience in the e-reading window above.  The color screen goes dark after 30 or so seconds and becomes a navigational tool meaning you can swipe the screen to turn pages. I found the swiping on the color screen to be less responsive than what I am used to on my iPod.

Device synching: Perhaps and early bug, but the book synching between my Nook and my desktop PC e-reading software does not work. I know a software update for the desktop and iPhone app is being planned.

Here’s what I don’t like about the Nook

Newspaper e-reading: Like all other dedicated e-readers, the newspaper experience is not very good. The content is rendered in ePub, so it looks slightly better than the Kindle, but not enough to be of significant interest.

Odd navigational features: Some of the reading navigation such as up and down arrows and opening content take place in the lower color window. I find it awkward; there should be some sort of controller by the e-reading window to handle those functions.

In reality, the battle is not an all-out war as the Kindle is in ready supply and Barnes & Noble is fulfilling pre-orders; you cannot walk into a Barnes & Noble retail store and buy one just yet. Once the Nook is on the shelf in its close to 800 B&N stores, a number of other e-readers will be in retail channels (such as the Alex) or close to shipping. With that in mind, it will be interesting to see how the Nook does when there are other e-readers on the market that have similar features (two screens) and support ePub. Clearly, the Nook will have a window of opportunity, but just how big that window is remains to be seen.

So, new battle lines are drawn: e Pub (universal open format, DRM primarily from Adobe’s ACS4) vs. .azw (Amazon’s proprietary DRM of the Mobipocket format) vs. good old fashioned HTML, DRM by…well, probably Google. HTML 5.0 does not currently stack up well against e Pub (which is XHTML) as e Pub contains specific metadata referring to publishing specific content such as table of contents. Fast forwarding, Google could turn its Chrome OS into an ereading environment complete with DRM and open up application development to those wanting to innovate using HTML (which itself is a format/platform in evolution). All of this dovetails nicely into Google Edition, the search megagiant’s plans to conquer the commercial ebook world.

Alex is betting that one of the reasons that advanced development for HTML as a flexible book format (there are many books available in HTML, but they work only in web browsers) stems from the fact that few ereaders contain web browsers because E Ink does a poor job of rendering web browsers. Using the dual-screen approach somewhat solves that problem. On the other hand, Barnes and Noble’s Nook, also an Andoid device, has a dual screen but the color LCD does not currently support a web browser.

There is some clarity in all this confusion: it is clear that a key player in this ebook melee will be the developer community. Developers will gravitate toward the platform that offers them scale, room to innovate and make money. Waiting in the public shadows, perhaps with the ability to tie the pieces together (format, device, development, content, sales) is Apple. Even without a formal announcement, it is Apple’s opportunity should it move from somewhat stealth to full-scale attack. As we speak, Apple’s brass is apparently talking to publishers of all stripes as well as key developers before taking the ereader plunge. The Magic 8 Ball says yes, with a Spring 2010 launch. Will the ereading battle end at that point or only get more interesting?

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There’s more: the device will have two screens. A top screen, the reading pane, is an e Ink display and will not come with a web browser (E Ink based-browsers offer a notoriously poor web experience). The bottom TFT screen will be a color display and is powered by the Android O/S which, Barnes and Noble says, allows for optimum navigation and user experience in a small space on a mobile device. . The bottom window will be for shopping but also will support Android apps, however any apps that require web access will have to use WiFi support as 3G service is available only for book-related transactions (which keeps bandwidth costs down for B&N). Barnes and Noble will also facilitate synching of all content between The Nook, smartphone apps and Barnes and Noble’s desktop ereading software.

Anyway you slice Barnes and Noble’s announcement, The Nook is a game changer for the current market and one that will force Amazon’s hand even with Amazon’s recent release of an international Kindle. Regarding loaning ebooks you can lend Nook to Nook, as well as Nook to other Barnes & Noble eReader-enabled devices (such as iPhone, iPod touch, select Motorola and Blackberry smartphones, PC and Mac.) Just as with a physical book, the lender will not have access to the book during the two-week period (or earlier if the person you loaned it to returns it sooner). Banres and Noble plans on fully leveraging its retail presence by offering Nook owners special in-store content such as book previews. By encouraging Nook users to browse and shop with their devices in Barnes and Noble stores, these early adopters become product evangelists (not to mention demonstrators).

By supporting e.pub, the International Digital Publishing Forum’s open ereading format, consumers have a wider range of choices than with Amazon’s Kindle which supports Amazon’s proprietary DRM, .azw. with only the Kindle DX supporting PDF. Consumers also can borrow books from public libraries who offer digital lending programs as the vast majority of libraries support .epub and .pdf with their titles.

Because of its rich set of features, retail merchandizing possibilities and open format support, The Nook not only impacts ereaders in the market (Kindle, Sony Reader) it takes some of the luster off of such pending ereaders as Plastic Logic’s Que and the new wireless iRex. The next move in the ereader space belongs to Amazon. That sound you heard was the air being let out of the Kindle’s tires. Amazon is now forced with the decision to be pragmatic and support the open .epub format or risk being locked out of the market.