Barnes & Noble Challenges Kindle

By Battle Road Research, an equity research firm.

Weighing in at 11 ounces, and with a price tag of $259, Barnes & Noble's(BKS Quote) Nook represents the latest entrant in the growing e-book reader category.

Although portable e-book readers have been available for several years, Amazon.com (AMZN Quote) jump-started the category with the Kindle, a dedicated reading device that unlike its predecessors included two breakthrough technologies. Those are:

• a unique, gray-scale imaging display manufactured by E-Ink of Cambridge, Mass., that allows readers to comfortably read and scroll through text, without the annoyance of a back-lit display
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• A wireless transfer capability that allows hundreds of thousands of books to be downloaded in under a minute, regardless of page length

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Barnes & Noble will enter the e-book reader fray next month with the Nook, a new e-book reader that embeds many technologies used by the Kindle, and raises the ante in some areas. The Nook features the same digital display as the Kindle, as well as a wireless connection that enables fast downloads of e-books.

A novel yet controversial feature will be the Nook's ability to share books between various electronic devices, for a period of up to 14 days, though the details on how this will work are sketchy. The Nook will be powered by Google's (GOOG Quote) Android operating system, which has lately been appearing in a number of smartphones.

In a sense, Barnes & Noble may suffer from being the third entrant into the category, in the sense that Amazon may have shipped close to 1 million Kindles already, and Sony(SNE Quote), for its part, has said it has shipped close to half a million of its e-book readers.

Amazon's Kindle 2, the second incarnation of Amazon's e-book reader, is lighter, faster, sleeker and less expensive than its predecessor, and began shipping in February 2009, with a price tag of $359.