Tech Rumor of the Day: Barnes & Noble

Updated from 8:29 a.m. EDT

Rumor has it you can soon add one more so-called eBook to the Amazon (AMZN Quote) Kindle and Sony (SNE Quote) Digital Book party.

Barnes & Noble (BKS Quote), the nation's No. 1 bookstore chain, is working with a device maker and Sprint (S Quote) on a Kindle-like device, according to one wireless industry insider. The news comes a week after the CTIA wireless show, where sources say there was heavy speculation surrounding Barnes & Noble's plan to give eBooks another try.

Barnes & Noble had been in discussions with Verizon (VZ Quote) as a possible wireless partner for the project, but those talks ended. The impression the insider got was that Barnes & Noble was going with Sprint, the wireless service used by Amazon's Kindle.

Some observers wouldn't rule out AT&T (T Quote) as another potential wireless media download service provider. AT&T, Apple (AAPL Quote) and Amazon partnered to deliver eBooks to iPhones last month. And last week, AT&T was reportedly exploring the eBook option.

If true, the device would give Barnes & Noble a direct competitor to the popular Kindle from Amazon. Fast network speeds for book downloads and sleeker designs have helped turn Kindle into a big success story for Amazon and an electronic opportunity for the publishing industry.

Kindle is expected to net Amazon a gross profit of roughly $63 million on about $285 million in sales this year, according to estimates by Collins Stewart analyst Sandeep Aggarwal.

Barnes & Noble has been through this before. In 2003, the company ended a three-year eBook partnership with Microsoft (MSFT Quote) and Adobe (ADBE Quote) the electronic publishing shop, after suffering disappointing demand for the tablet device.