Amazon's Kindle was the first successful E-Reader, and it remains the reader with the largest worldwide adoption. This is partially due to being one of the earliest products of its type, and partially due to the great selection in Amazon's E-book store. (The Kindle going international didn't hurt either.) Any company hoping to compete with Amazon's reader is in for an uphill battle. At least, that's what I thought until I saw Barnes & Noble's nook.
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It's rare to see one product whup the everliving hell out of its competition so thoroughly, but B&N have done just that with the nook. Both the Kindle and the nook cost exactly the same amount; $259. Both the Kindle and the nook have 3G, but the nook also has WiFi on top of that. Both machines have a 6" screen, but the nook also has a 3.5" color LCD touch screen that runs Android.
The nook even comes with a better book store. In preparation for its release, B&N have increased their bookstore to hold over 1 million titles. It is now the largest eBook store in the world. In addition, the nook features digital lending, which allows you to let a friend 'borrow' a title for 14 days without charge. Sure, not every title qualifies for this, but the Kindle lacks that service entirely.
Right now the Kindle has only 2 advantages over the nook. First off, the Kindle has brand recognition, which is something the nook won't take long to gain. Barnes & Noble is as recognizable a name as Amazon, and the launch of a superior reader should gain them a lot of adherents in a short span of time. The Kindle's only other advantage is that it is international, and that'll only last until an international nook hits stores.
In order to fight back, Amazon is going to have to innovate. Simply offering larger screens and more titles than the competition isn't going to help them now. Barnes & Noble has the resources and, apparently, the vision to dominate the E-Reader market. If Amazon wants to stop that from happening, they're going to have to put out a product that's as far ahead of the nook as the nook is ahead of the Kindle.
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This is all very good news for consumers. A battle royale between two of the world's largest booksellers for the title of E-Reader king is going to lead to some very competitive prices, and some seriously cool gadgets. 2010 is going to be a good year.