With Upgrade, Barnes & Noble Positions Nook Color as Cheap iPad Alternative

Barnes & Noble today pushed out a major software update to the Nook Color e-reader, offering its own app store, an email client, the ability to play Flash video, and enhanced books. The upgrades push the Android-based device further into the tablet space, and Barnes & Noble clearly hopes customers will look at the $249 gadget as an inexpensive alternative to the iPad.

"Since we launched the Nook Color, we've called it the reader's tablet," said Jamie Iannone, Barnes & Noble's president of digital products, during an online press conference this morning. When asked whether Barnes & Noble wanted customers to think of it as an e-reader or a tablet, he said, "We think it combines the best of both worlds. It's an amazing experience. If you love reading, this is your tablet."

The update, version 1.2 of the Nook Color software, brings with it support for Android 2.2 "Froyo" and Adobe Flash video. The company said it surveyed Nook customers on the main features they wanted in a tablet devices, and they responded with email, Flash video, and "certain categories" of apps, specifically games, organizers, and learning apps.

"Since the launch, you've been able to play video on the product," said Iannone. "But with Flash, we worked closely with Adobe. Now you can go to any of the different Flash sites—YouTube, National Geographic, and [others]. We've made it easy for users, with mobile mode or desktop mode."

Perhaps the most relevant upgrade is the addition of an app store specifically for Nook Color apps. At launch, the Shop will offer titles like Angry Birds, Pandora Internet radio, and calendars. Like other app stores, there's a mix of paid and free apps, with half of them being offered for $2.99 or less, Barnes & Noble says. Revenue-sharing with developers is the industry-standard 70/30 split. However, only 125 apps are currently available.

"We're not trying to create the worlds largest app offering," said Claudia Romanini, Barnes & Noble's director of developer relations. Instead, the company is focusing on apps that are tailored to Nook and its reading-centric experience. Some 5,000 developers are said to be registered.

Some of the new apps on offer will come baked into the update, including an email client and an app called Nook Friends. The email app is compatible with any POP or IMAP account, so Nook Color users can easily check Web mail like Gmail, Yahoo Mail, and other popular email services. Barnes & Noble said the client will support push notifications, with alerts being visible on the home screen whenever a new email comes in.

Nook Friends enhances and consolidates the Nook Color's sharing feature. If you'd like to borrow a book from a friend and fellow Nook user, now you can send a request directly from the app. You'll also be able to browse your friends titles (only the ones they share) and see the ratings and reviews they've given to them.

At its core, the Nook Color is still an e-reading device, and the 1.2 upgrade enhances that as well. Nook Kids, the platform's picture-book experience, now boasts interactive features that let young readers do things like draw and move pictures by touch. Regular Books can now offer in-page video. And the Nook Newsstand offers "dozens" more newspapers and magazines, including National Geographic Kids, ESPN The Magazine, and PC Gamer.

The update also brings with it a host of other minor enhancements like enhanced pinch and zoom, improved global search, a battery indicator, and shortcuts to settings and audio.

With the upgrade, it's clear Barnes & Noble hopes people considering buying an iPad will give the Nook Color a look and consider its value as a $249 device that offers some key parts of a tablet experience (the iPad starts at $499). One aspect where the Nook is plainly inferior, however, is the apps—just 125 to the iPad's 65,000 (and that's not including 300,000 iPhone apps the iPad can run). The move also puts pressure on Amazon to move forward with its plans for a tablet version of the Kindle, if any.

The 1.2 update is available to Nook Color owners today at www.nookcolor.com/update, and Barnes & Noble said it would push it out to the devices themselves in the coming weeks.

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Barnes & Noble improves Nook Color to take on iPad

NEW YORK (Reuters) – Barnes & Noble on Monday introduced new features to its Nook Color e-reader designed to make the device more competitive with Apple's iPad and to offer more functions that Amazon.com's Kindle does not.

Barnes & Noble said in a press briefing over the Internet that the updated Nook Color includes a store to buy software applications, or "apps;" lets users play games such as "Angry Birds;" and allows them to access email from their Google Inc Gmail and Yahoo Inc accounts.

It also runs on Google's Android 2.2 Froyo operating system, allowing users to watch videos on Flash 10.1. The new features address shortcomings pointed out by device reviewers when Barnes & Noble introduced the Nook Color in October.

"Consumers said they wanted tablet-like features," said Jamie Iannone, president of the bookstore chain's digital products division.

The price for the Nook Color is staying the same at $249.

The iPad, which has sold about 20 million units since its launch last year, is a tablet that has e-reader functions, and Apple operates a digital bookstore.

In contrast, Amazon's Kindle is the best selling e-reader but does not have a color touch screen and Wi-Fi Web browsing, features that are standard on tablets.

"I don't think they're responding to the iPad as much as they're trying to beat Amazon to the same punch," said Forrester Research analyst James McQuivey.

McQuivey estimates Barnes & Noble has sold 400,000 Nook Colors since the device's October launch and said the device's sales could reach 3 million units by year-end.

The black and white Nook was introduced in late 2009 and has sold about 2 million units, according McQuivey.

Barnes & Noble also introduced on Monday an ad campaign that does not include the bookstores for which it is best known but positions the Nook Color as a tablet specifically made for book enthusiasts.

Barnes & Noble runs about 720 superstores but has invested heavily in the Nook to grab more of the growing e-books market while sales of traditional paper books have been dwindling.

In February, the retailer suspended its dividend, preferring to use that money to develop the Nook. Shares have fallen 47.7 percent since then.

The update Nook Color will offer features tablet buyers expect, but does not give Barnes & Noble much of an edge, one analyst said.

"They're doing at a minimum what's necessary to stay in the race, but they're not leapfrogging anyone," said Morningstar analyst Pete Wahlstrom.

(Reporting by Phil Wahba, editing by Gerald E. McCormick)

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