5 Reasons Why Barnes & Noble's Nook Really Will Challenge Kindle

The Barnes & Noble Nook e-reader is here, and now that the initial hype is subsiding, it's even clearer that the Nook has everything it needs to challenge Amazon (NSDQ:AMZN) and its Kindle. Priced at $259, the Nook was unveiled Tuesday after most of its pertinent details -- including that it would run on Google Android and have a color screen in addition to a 6-inch E-Ink screen --had leaked over the past few weeks.

"Any way you slice Barnes & 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," wrote Allen Weiner, a vice president at Gartner Research, in a Tuesday research note.

The hoopla surrounding the second-generation Kindle release back in February ensured two things: first, that e-books and e-reading were finally a consumer-electronics segment reaching critical mass, and second, that every e-reader released following the Kindle (and its larger brother, the Kindle DX), would be judged by comparison -- the wave of so-called "Kindle killers" that sought to challenge Amazon. (Click here for a look at what that crop of Kindle killers looked like just a few months ago -- when Amazon still had it easy.)

While Forrester Research projects Amazon to close out 2009 with a 65 percent market share of e-readers in the U.S., Barnes & Noble seems to have everything it needs to start taking big bites out of that market share as early as this week.

Here are the five most important factors that will put Barnes & Noble's Nook into the e-reading catbird seat.

1. The Nook has more in the design -- and under the hood.

You can split hairs over minor differences; Kindle weighs an ounce less for example, has a longer battery life by four days, and the two e-readers measure a little differently. But those detractors get eclipsed by the Nook's most attractive features, including a color TFT screen beneath its main, 6-inch E-Ink screen, support by Android on that color screen for mobile Internet browsing, support for both 3G and Wi-Fi, and a virtual, touch-screen QWERTY keyboard.

That all that comes for the same price as Amazon's Kindle (after two price cuts this year) will be crucial when it comes time for consumers to open their wallets for e-reading devices.

2. The Nook gets the format game.

Amazon and Kindle have long been criticized for the Kindle's "closed" format -- i.e., Kindle for the most part only supports proprietary Kindle formatted content -- and that may prove to be Kindle's fatal weakness, as evidenced by how everyone from Sony to iRex and Plastic Logic have taken aim at it. The Nook offers support for EPUB -- the open e-book standard -- which further exposes Amazon's limited format range (Kindle, and PDFs for the Kindle DX only).

3. The Nook is a content powerhouse.

Barnes & Noble's Nook allows consumers to "loan" books to one another (on other Nooks, iPhones, iPod Touch and a few other mobile devices) for 14 days free. The Nook also offers 500,000 free titles, a larger content mothership than Amazon thanks to the 1 million-plus titles in Barnes & Noble's eBookstore, and also has deals with media companies to offer newspaper and other periodical subscriptions. There's a lot there.

4. The Nook is available to test-drive.

The Nook is expected to start shipping in November, and customers could place orders as early as Tuesday night. Barnes & Noble is making it available for purchase not only online (through nook.com and barnesandnoble.com), but also, crucially, at its 700 brick-and-mortar retail stores. Not sure about your e-reader purchase? Test it out the next time you're in a Barnes & Noble, the company offers.

"Barnes & Noble plans on fully leveraging its retail presence by offering Nook owners special in-store content such as book previews," Gartner's Weiner writes. "By encouraging Nook users to browse and shop with their devices in Barnes & Noble stores, these early adopters become product evangelists (not to mention demonstrators)."

5. The Nook has Barnes & Noble's name recognition.

The problem with would-be Amazon Kindle challengers like Plastic Logic, iRex, the Alex reader from Spring Design and Interread is that, for the most part, potential consumers don't know who they are. Barnes & Noble knows its brand is still strong and has already demonstrated it knows how to leverage that brand. The foundation is already there to challenge Amazon; Barnes & Noble just needed an e-reading presence (check), an e-book store (check), and a device of its own (check).

"The next move in the e-reader space belongs to Amazon," Weiner said. "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."