Update: Barnes & Noble Announces New Nook; Amazon Responds with Cheaper 3G

Barnes & Noble’s new Nook, the Simple Touch Reader, aims to compete with the paperback. Following a couple of weeks of rumors (and an internet leak last night) Barnes & Noble (NYSE: BKS) CEO William Lynch appeared at the company’s flagship New York City store today to announce the new Nook, aimed at “those turned off by buttons, keyboards and complexity”: the Simple Touch Reader. Lynch introduced the Simple Touch by quoting a letter from a customer: “My family and I are looking for the perfect Christmas gift for my grandmother…I’m wondering why you haven’t created a version of the Nook for her.”

“The Kindle 3 has 38 buttons,” Lynch said. “That’s 37 more than the new Nook.”

The new Nook is priced the same as Amazon’s Kindle WiFi Kindle 3, which does not have a touchscreen. While Lynch spent several minutes of his presentation comparing the new Nook to the Kindle 3, he didn’t mention the new eReader Touch that Kobo announced yesterday. It’s also a black and white touchscreen reader, priced at $129.99. Kobo also announced yesterday that it is dropping the prices of its first-generation readers to $99–and many analysts believe a price point at or below $100 is the real tipping point for e-reader adoption.

The new Nook is WiFi-only. In his presentation, Lynch said 3G was not important to the group the new Nook is targeting. Seemingly in response, Amazon (NSDQ: AMZN) announced tonight that it is releasing a Kindle 3G with Special Offers for $164.

The Simple Touch has a 6″ black and white touchscreen, weighs 7.5 ounces, and promises up to 2 months of battery life on a single charge. It ships June 10. Is its $139 price tag enough to convince Grandma to give up her paperbacks?

The cheapest Kindle is currently the Kindle WiFi with Special Offers, at $114. Lynch said Barnes & Noble doesn’t have any plans to offer an ad-supported Nook and called ads “obtrusive,” although many consumers don’t seem to mind them on the Kindle. Barnes & Noble will drop the first-edition Nooks’ prices to $119 for WiFi (from $149) and $169 for 3G (from $199) while supplies last, but with its new Nook, it has not moved much closer to the $100 mark.

Like Kobo’s new reader, the new Nook provides some social networking options, though it does not connect to Facebook or Twitter. Nook Friends allows users to see what their friends are reading, share, recommend, lend and borrow books. Next month, Barnes & Noble will launch MyNook.com. Through the website, users can access library, see friends’ recommendations, and shop from any computer and their Nook will sync wirelessly.

Nook Apps will not be available on the Simple Touch Reader, only on the Nook Color tablet.

Lynch reiterated last week’s statement that the Nook has captured over 25 percent of the e-book market. “Based on industry data, it is our belief that Nook Color is the bestselling Android tablet in the U.S., second only to the iPad,” he said.

Lynch refused to answer a question about how many Nooks have been sold. “We’re not the only company who’s been secret with our data,” he said. “What we’ve said is millions.” He said that digital sales are the fastest growing part of Barnes & Noble’s business “by far” but didn’t provide numbers.

Lynch did not take questions about Liberty Media’s recent bid for Barnes & Noble.