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What The Nook Color Means For Amazon, Sony

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Today, amid the kind of rumor and speculation that is more typical of a Silicon Valley announcement, Barnes & Noble (NYSE: BKS) unveiled its Nook Color, a second Nook to complement the barely one-year-old original. The Nook Color brings a 7″ color LCD touch tablet device to the reading market, filling a gap between today’s grayscale e-readers that use e-Ink technology and tablet PCs like the iPad.

This move puts B&N ahead of both Amazon (NSDQ: AMZN) and Sony (NYSE: SNE) — the longtime holders of the number 1 and number 2 slots in the e-reader business. Not ahead in terms of device sales, because this new Nook, priced at $249, will be likely to drive a few hundred thousand units before year-end. But ahead in terms of vision. Because one day, all e-readers will be tablets, just as all tablets are already e-readers.

There are three good reasons why tablet readers are the right thing for the industry to move toward:

Multitouch interfaces have become the new standard. Once consumers experience multitouch, they don’t really ever go back to thinking a mouse or button interface makes much sense. Doesn’t mean they never touch another button, it just means they prefer to interact in a more natural and intuitive way. That’s why Sony recently upgraded its reader line to include touch on even its cheapest model, the Pocket Edition.

Color is beautiful and necessary. True, you don’t need a color screen to read a Dan Brown novel. Or do you? Today’s Dan Brown novels don’t need color because they were written under the assumption that color wasn’t an option. But his next book won’t be. And the thousands of children’s books in print that already depend on color fit nicely on this device. Nook Color, for at least a short period of time, will have the distinction of being the only color reader that doesn’t cost $500 or more. Which helps explain B&N’s enthusiasm in announcing Nook kids, a storefront for digitally enhancing and distributing children’s books . Most of that content is made twice as interesting — to parents who buy devices and e-books — if it is in color.

Publishers want a color device to experiment with. Right now, publishers are trapped between grayscale books with limited or no interactivity and iPad apps they don’t have the money or time to develop. Nook Color will offer an opportunity to put books that are already sold in color — cookbooks, travel books, to name the most obvious — in an e-bookstore to find out how much people will pay for those, without having to get into the world of iPad app pricing and development.

That said, this shift won’t happen immediately. Amazon’s Kindle has about two-thirds of the US market for e-reader devices as well as e-books. The new, lower prices on the Kindles are drawing people into the market quickly. And once drawn in, it’s unlikely that they’ll skip over the cheaper market leader to go right for the $249 Nook Color. Instead, the new Nook is more likely to attract people already familiar with the market who are ready to move to a device that can satisfy deeper content longings.

Those content longings will go beyond books, however, to include music and video, two staples of the iPad experience. Suddenly B&N will find itself attracting a market of people who want to do more than read books from B&N. They’ll want to use the Android-based device to play games, check email, and surf the web, even if they primarily use it for consuming personal media.

But the apps needed to deliver those experience will only be available after developers learn how to develop for Nook Color. In other words, Android apps won’t automatically work on Nook Color, though it will be relatively easy for developers to port their apps to Nook, subject to B&N’s approval. (It should go without saying that one developer B&N will likely reject is Amazon should it try to develop a Kindle app for the Nook Color!)

While the device won’t unseat Amazon, it does throw down a gauntlet to Amazon and Sony both. Both of those companies could easily develop a tablet device focused on consumer media — and both have sufficient motivation to provide media beyond books.

But I’m starting to doubt whether Amazon will rise to that challenge. After all, Amazon may see itself as a software platform provider by this point — they make the Kindle platform available on as many devices as possible and they sit back and count the e-books they sell. Sony, on the other hand, could build a tablet that is part e-reader, part PSP, part video player, part VAIO computer — the options for Sony are endless. So consider B&N’s move as the first volley and sit back with me and see what else develops.

James McQuivey is an analyst at Forrester Research, where he serves Consumer Product Strategy professionals. James blogs here.

This article originally appeared in Forrester Research.

10 Responses to “What The Nook Color Means For Amazon, Sony”

  1. $99 Nook WiFi at Wal-mart on Black Friday is what I have heard. At that price, it will be nook for me. Honestly, it is the replaceable battery and micro SD slot that seal the the deal for me. That and the lending.

  2. Staci D. Kramer

    @Steven for what it’s worth, I’ve been using a review DX and I find it to be a good experience. It’s still a little heavy but for me the main objection is it’s missing left-hand controls. Like all Kindles, if you want to read at night at home, yes, you need a light. But in sun or glare, it’s readable where my iPad is not.

  3. Steven Blackman

    I have a graveyard of Kindles. 1st generation, 2nd generation AND NOW I’m tempted to get the DX because of the 9 inch screen which formates books, mags and newspapers better with fewer page turns. It’s also being billed as having 50% more contrast then previous models. But what does 50% better contrast MEAN?
    It means that Kindle (all e-ink) readers are reading with cobwebs over our eyes trying to convince ourselves that e-ink provides a realistic reading experience. It doesn’t. Book paper is WHITE, not GRAY, and the same people that complain about “eye strain” spend all day looking into a computer screen (like you are doing right now) without so much as a squint. Try reading a kindle in low light (like most of us do) at night in bed.
    I can’t see the fr’king pages without waking my wife up by turning on a night light. And even with a night light I have trouble reading e-ink. If you say you don’t, then you’re either under 40 years old or you don’t feel handicapped reading black print on a light gray background. However I DO! So I welcome to the NOOK color.
    I don’t care if you call it a pad or a pod. For me it should make reading more pleasurable and fun and at 1/2 the cost of an Ipad which would have been my first option had it not been for the price.

  4. James Wallace

    I have to agree with several of the comments citing the differences between e-Ink displays, and LCD technology. For me, the main attraction of Amazons kindle was the eInk display. A regular PC screen is just not the same. These devices should deliver an experience mimicing reading an actual book, not using a laptop/computer device.

    Multi-touch? I’m sorry, I don’t see how that’s relevant on a book reader. With properly formatted files, one shouldn’t need to do any scrolling or zooming… so what else is multitouch good for?

    The only thing this announcement reveals is that B&N just don’t “get it”.

  5. The key word is “LCD”. Can’t wait until a good, reasonably priced color e-book comes out that uses e-ink. Of course Fujitsu made one but it is very expensive and apparently is quite poor insofar as performance. I will however pass on the LCD monitors.

  6. e-reader uses e-ink, that’s what makes them unique, the rest are pads, and good luck winning in that market, there will be 70 pads by next year end. B&N, bad move, you went to war against Apple, a war you will surely loose.

  7. ” Nook Color, for at least a short period of time, will have the distinction of being the only color reader that doesn’t cost $500 or more”

    Barnes & Noble and their new Nook are far from the only color touchscreen reader under $500. Borders sells the Velocity Micro Cruz Reader – with a 7″ color touchscreen, music, video, and wifi – for $170 right now, and the Velocity Micro Cruz Tablet with 7″ color touchscreen and Android OS for $299 (coming soon). I haven’t looked at either so I don’t know how they perform, but then again, I haven’t seen the new Nook either yet.

    To me, the whole point of getting an e-reader is:
    1) the eInk so I can read for hours without eyestrain or headache
    2) long battery life so I can read anywhere for hours and take it traveling without having to worry about recharge – the new color Nook lasts for 8 hours of continuous reading, evidently, vs days/weeks on eInk readers.
    3) lightweight device so I can hold it comfortably while reading and transport it easily while traveling.

    If I want to browse the web or check my email, that’s why I have a smartphone, which I carry around with me anyway. If I want tablet functionality, I’ll get a real tablet. The new Nook seems to me from the announcement like a weak tablet which doesn’t satisfy the purposes of an eReader, and therefore fails on both fronts.

  8. I don’t agree with this article because it does not consider the fact that there are display technologies such as the Mirasol display mentioned by other commenters as well as color e-ink existing right now. Though they are new and somewhat pricey, they should be the direction e-readers should evolve into. A tablet with an LCD is a totally different category and can no longer be called a e-reader for the simple fact that it CANNOT emulate the text of an actual book. Color is the way to go but it needs to be done in the right way and not by slapping on an LCD and pretending that someone can spend 1-2 eye-searing hours reading off of it.

  9. I think you could be right, Lucian, solely because Amazon could make a color tablet using Mirasol that would cost roughly what an iPad costs — B&N has chosen to go dramatically cheaper, I assume in hopes of getting out ahead of the more expensive devices