Barnes & Noble (s bks) today released a software update for its Nook Color e-reader, bringing Android 2.2 and third-party software to the $249 device. The software update, version 1.2.0, will be rolling out automatically to Nook Color devices starting this week, but can be manually installed with a download direct from the B&N Nook Color support site. Updated Nook Color e-readers support Adobe (s adbe) AIR and Flash and gain access to the Nook Apps store.
Software for the device is limited, however. Instead of adding access to the full Android Market and several hundred thousand apps, the Nook Color supports the new Nook Apps store which launches with just over 125 titles. There are a few top-tier apps available though: Goodreads, Angry Birds, my6Sense and Gameloft’s Uno are first-day launch titles. Barnes & Noble is also adding a dedicated email app for its tablet as well as Pandora Internet Radio, Crossword Puzzle, Sudoku, Chess, Contacts and a photo Gallery app.
Three other Nook-branded features are included with the software update. Nook Friends is a new beta app that allows users to share reading activities and book recommendations while also using the LendMe feature to share actual books. Nook Kids brings more interactive functions to children’s titles. And Nook Books Enhanced supports audio and video in supported e-book content.
With a wider range of smartphone and tablet functions, the Nook Color becomes more attractive at $249. Although the Nook Color uses a slower processor than most other 7-inch tablets, it’s also less expensive by $100 or more. The Wi-Fi version of Samsung’s Galaxy Tab, for example, costs $349.
By adding an application store to the Nook, even one that’s currently limited by comparison to Google’s app store, consumers may opt for a multipurpose e-reader instead of a traditional tablet. And if B&N continues to woo developers (it currently says more than 5,000 are registered to build Nook Color apps), the demand for a Nook Color is looking colorful, indeed. That could bode well for Amazon (s amzn) which has all the right pieces to complete an Android tablet puzzle of its own.
I’m willing to bet that at this price, and with the new features, more people will be giving the Nook Color a closer look. In a world filled with iPads (s aapl) and scads of Honeycomb tablets on the way, am I right?