Previewing the Nook: Why Kindle Nation Should Love the Nook eReader as a Worthy Kindle Competitor

I am thrilled with the Nook, the new $259 ereader from Barnes & Noble. But perhaps not for exactly the reasons Barnes & Noble might prefer.

First, I really do love the excitement of this showdown: it creates the kind of feeling we might have had if Jeff Bezos and Steve Riggio met down behind the high school with their muscle cars to race for pink slips.

A Worthy Competitor. If Barnes & Noble had unleashed the Nook three or four years ago -- making it the first serious entry into the ebook marketplace -- and backed it up with a fearless, relentless marketing campaign, the book and ebook business might look very different today. But the company actually backed away from the ebook business in 2003, and it was Amazon that took the risks and transformed the terrain of the book world with the Kindle. As a result, while it is probably true that Barnes & Noble has no choice but to do what it is doing with the Nook, it is very likely that the primary impact of the Nook will be to provide the kind of worthy competition that drives Amazon to make user-friendly changes in the Kindle. This has already begun to happen, with several major Kindle developments -- see Friday's post entitled Nook Whimpers, Kindle Bangs for the details -- during the past week that resulted directly from the emergence of the Nook. It may not be the role that Barnes & Noble seeks, but it is certainly a role that Kindle owners should welcome. (As a consequence of all this, and please bear with me for this, but it is impossible to cover the Nook without covering its marketplace context; hence the sequence of preoccupations in this post.)

I considered writing a smart-aleck headline like "Lack of Nook, e-Pub May Not Spell Doom for Kindle," or "Noo Kid on the Block Underwhelms Marketplace," or even "Kindle Response Nooks B&N," but such humor isn't very becoming, and I want to give credit to Barnes & Noble. It's been 23 months since Amazon launched the Kindle, and B&N has used that 23 months well to prepare what looks like the best ebook device, hardware-wise, on the market today.

A Little History. Mega-chain or not, Barnes & Noble has some of the coolest bookstores in the world. It has been around since 1873 and is the largest bookseller in the United States. Even with all the problems that face the book trades today, it's turning a nice profit for its shareholders ($1.41 per share on 55 million shares at last check) and its CEO (Steve "ThanksDad" Riggio, whose 2007 earnings topped $3.1 million, which is a lot of dough unless your last name is Bezos).

But the last 15 years have been tough for Barnes & Noble. It keeps finding itself in the position of saying, "H'mm, maybe we should try that, too," after innovations by Amazon. First there was this wild and crazy idea, back in 1994, of an online bookstore. Who thought that would work? By the time Barnes & Noble jumped in with BN.com in 1997, well, it was just too late. BN.com's traffic has never been more of a small fraction of Amazon's web traffic since, and the company has never quite figured out how to leverage its huge brick-and-mortar footprint into a symbiotic online advantage. Since 1997 there have been a lot of seemingly small "inside baseball" innovations in which Barnes & Noble has also come in second both in terms of timing and of market impact, like the used books market and affiliate marketing, while frankly sounding a bit whiny about its reasons for not innovating in such areas. The anecdotal experiences that many of us have observed as customers have been tracked by the two companies' stock performance: Barnes & Noble shares have fallen from the high 40s to about $18 since early 2006, while Amazon shares have soared from that same high 40s range to about $118 at Friday's close. And this chart provides a longer view, with Amazon shares in green, Barnes & Noble in red, and the NASDAQ index in blue.



No doubt there was a lesson in the online bookselling experience for Barnes & Noble. Its huge advantage in physical bookstores, overall customer base, and number of books sold did not translate into any advantage at all when it jumped into online bookselling several years after Amazon, because Amazon's service, selection, and customer experience simple did not allow BN.com any daylight in which to wiggle through and take back online market share. In the dozen or so years since BN.com's launch, this has never changed. Barnes had no choice but to create an online bookstore, but that does not mean it is a factor, either in market share or buzz. Consider: How often do authors and publishers check their sales rankings on BN.com?

And now we have the Kindle and the Nook. Or the Nuke. Or the Noo Kid on the Block.

At first blush the Nook looks like everything I want my Kindle to be. Or, more to the point, almost everything that the citizens of Kindle Nation have been asking for since the Kindle was launched two years ago next month. For anyone who follows Kindle developments, it is obvious that Barnes & Noble studied and cherrypicked the Kindle customer wishlist, and did a pretty good job of it. The Nook is priced at $259, and now, so is the Kindle, after having debuted at $399 before eventual price cuts to $359, then $299, then $279, and now $259.

So what's to choose between the two?

Points of Comparison. First, let's start by summarizing Barnes & Noble's own checklist screen comparing features of the Nook and the Kindle. There are a few sneaky omissions such as the fact that the checklist makes no mention of a wireless web browser or a seamless Wikipedia hookup, which are free on board on the Kindle and nowhere to be found on the Nook. It's a bit like a car manufacturer setting up a chart to compare its new model to the Prius and leaving fuel efficiency out of the mix of comparison points. But Barnes & Noble can be forgiven, for a while longer at least, for the fact that the comparison has not been updated to reflect some other Kindle developments:

• the fact that the Kindle 2i has gone international,
• that its wireless service is now provided, like the Nook's, by AT&T, and
• that Kindle Apps for other devices are being expanded and now include synching of annotations across devices.

The one area where the comparison gives the nod to the Kindle -- Word document support -- is not exactly a deal-breaker for prospective buyers, although it does seem weird that such support would not exist for the Nook, given how many Kindle owners find it convenient to read scripts, memoranda, and manuscripts with their Kindles. Then there are several areas where the Nook team congratulates itself on a distinction that makes less of a difference than might first seem to be the case:

• LendMe™ technology (less than meets the eye? see below)
• More than a million titles available/More than 500,000 free eBooks (aren't all these free eBooks easy to download to the Kindle as detailed in my Kindle guide?)
• Free Wi-Fi in all Barnes & Noble Stores (doesn't the Kindle come with free wireless in all Barnes & Noble Stores, as well as everywhere else?)

Otherwise, it's a reasonably objective comparison, and of course it doesn't miss out on the opportunity to point out -- often with a fair amount of line-by-line redundancy -- features that exist on the Nook but not the Kindle:

• Color Touch Screen - 3.5" TFT Color LCD
• Touch Control & Navigation
• Quick Library View by Book Cover
• Wi-Fi/802.11b/g
• Exclusive content when in your local Barnes & Noble store
• Directly load & read PDFs
• EPUB and eReader Formats Supported
• Replaceable colorful back cover
• Ergonomic back cover design for optimal hand fit
• Personalize screensavers with your photos
• Replaceable battery

Finally, the Nook comparison gives the Nook a check mark for "Android™ Operating System" without spelling out what this intriguing OS will be able to do on the Nook or noting that the Nook doesn't, like the Kindle, run Linux. And Nook gets a check mark for "Try reader in store before buying" but doesn't mention that the Nook charges a 10 percent restocking fee for returns while Amazon actually encourages prospective buyers to purchase a Kindle, test-drive it, and return it any time within 30 days if not fully satisfied for a no-questions-asked full refund and free return shipping.

Sharing Nook e Books. The Nook's LendMe™ technology for person-to-person lending sounded great at first blush, and could have been the furthest any ebook reader had gone toward realizing the social networking potential of ebook readers. But it did not take long before we found the kind of credibility gap that, if it recurs, could create a huge backlash and branding crisis for the Nook. Here's what Barnes & Noble says on its web page about the Nook's book-sharing feature:

Share favorite eBooks with your friends, family, or book club. Most eBooks can be lent for up to 14 days at a time. Just choose the book you want to share, then send it to your friend's reader, cell phone, or computer.

You can share nook to nook, but it doesn't stop there. Using the new Barnes & Noble LendMe™ technology... you will be able to lend to and from any iPhone™, iPod touch®, BlackBerry®, PC, or Mac®, with the free Barnes and Noble eReader software downloaded on it.

Unfortunately, there's a pretty serious credibility gap between that rather expansive marketing language and the information provided by Kristine_S, a Barnes & Noble staffer administering the eBooks Help Board on the company's website:

You can loan each eBook (providing the publisher allows this) one time only, for a period of 14 days, to any B&N eReader-supported device, including nook, Mac, PC, iPhone, iPod Touch, and BlackBerry. During this time you cannot read the eBook yourself. Hope that helps, and thanks for your question.

There are no guarantees that the lending feature will be approved by a critical mass of publishers, who have opt-in rights where the feature is concerned. And a natural concomitant of such a feature, one that would pay a micro-commission to Nook owners whenever they buzzed about or loaned an ebook and it led to a purchase, is nowhere.

Color. This may be a matter of the Nook being less than just a pretty face, but it will be fascinating to see how the existence of a color navigation display on the face of the Nook will affect its appeal, customer experiences, and unit sales. The color is limited to the small touch display at the bottom of the device face, below the black-and-white e-Ink display that is basically identical to the Kindle's. The color display adds a lot to the cosmetic appeal of the Nook, and should be an attention-getter that attracts a younger audience and helps sell Nooks. It may also prove to be a distraction from the core reading experience, and the basic point is that the color display does not display the content for which one would buy a Nook.

Connectivity. The Nook uses the same AT&T 3G Network as the Kindle 2i (the new International Kindle, which replaced the Kindle 2 with its Sprint network connectivity). The AT&T network provides less coverage than the Sprint network. Importantly, the Nook appears not to have a web browser and apparently Nook wireless will connect only with the Barnes & Noble ebook store, whereas Kindle wireless connects with the web, at least (for now) in the U.S.

Wi-Fi. The Nook also comes with 802.11 b/g Wi-Fi. If your favorite place in the world to read is in the coffee shop area of a Barnes & Noble bookstore, you're going to love the Nook. Barnes & Noble says it will provide free in-store wifi that will allow customers to browse through the complete text of any ebook in the store. Unless I'm missing something, this could mean that latte revenues overtake ebook sales among Barnes & Noble profit centers, but it is kind of cool, any way you slice it. It's good for generating physical bookstore visits, too. But there's a downside: two of the main things ebook buyers love about their devices is the convenience of reading anything they want in a snap, at home, or of being able to take their ebook readers on a trip without having to carry along a lot of physical books. There's simply not much overlap between those experiences and sitting at a Barnes & Noble store freeloading and reading their catalog. Likely Kindle Response: Eventually Amazon will probably add wi-fi to the Kindle, although it does not often come at the top of customer wish lists, and of course Amazon has no need to try to lure customers into its physical bookstores because, well, there aren't any.

SD Slot. In addition to having sufficient storage to allow 1500 books onboard, the Nook team has noticed Kindle customers' lament that the Kindle 1 SD card was dropped in later versions, and the existence of an SD card on the Nook allows storage space for thousands more books. Likely Kindle Response: I expect to see the return of the SD slot to a future Kindle model in 2010.

Size. At 7.7 x 4.9 x .5 inches, the Nook is smaller and thicker than the Kindle (8 x 5.3 x .36), nd weighs about an ounce more than the Kindle's 10.3 ounces.

Battery. Barnes & Noble claims that the Nook battery can be recharged both by USB cable and power adapter in 3.5 hours and will hold that charge for "up to 10 hours of reading time," which is a bit vague. The Kindle 2 battery holds its charge significantly longer given similar activities. On the other hand, the Nook trumps the Kindle in one area that has been a real annoyance for many Kindle 2, Kindle 2i, and Kindle DX owners, because the Nook offers a $29.95 replaceable battery, whereas Kindle owners with battery problems have to return their Kindles to Amazon for battery replacement at considerable hassle and, after warranty expiration, considerable expense.

Accessories. In keeping with its very successful focus on the Nook's aesthetic appeal, Barnes & Noble has rolled out an impressive array of covers and other accessories for the Nook, including the kate spade New York covers that have created much of the gadget's initial splash.

Audio. Since Audible.com is owned by Amazon, it should not be a surprise that the Nook apparently comes without the Kindle's capacity to play audiobooks. Both the Nook and the Kindle play MP3 files and have headphone jacks and external speakers.

Synching and Other Devices. The Nook allows easy synching between the device itself and Barnes & Noble's already available ebook reader apps for computers and mobile devices. Likely Kindle Response: It's already happening, with Amazon announcing last week that Kindle Apps for the PC, Mac, and Blackberry are right around the corner.

Availability. Barnes & Noble says the Nook will ship by November 30, and there are rumors that it may be available in Barnes & Noble's physical stores as early as November 20. Like Amazon before it launched the Kindle, Barnes & Noble does not have a significant track record as a technology manufacturer, so it will be interesting to see if it manages to avoid the stock-out problems that plagued the Kindle for over half of the first 18 months of its existence.

Warranty. Barnes & Noble is offering a two-year extended Nook warranty with accident-drop coverage at about the same price as the Kindle's two-year extended warranty, and like the Kindle the Nook should qualify for an even better extended/expanded warranty deal from SquareTrade.

Catalog. Form factor and hardware features for ebook readers are important, but they are equaled in importance by the availability and affordability of reading content. Although Barnes & Noble claims that over a million books are available in its ebook catalog for the Nook, it is important to understand that most of those titles are free public domain books made available through its partnership with Google Books. In the coming weeks, we and others will be taking a close look at the range and pricing of offerings available for the Nook, and comparing it to what is available for the Kindle. As with the Kindle, the Nook allows its owners to download free samples of any book, but early anecdotal indications are that the Barnes & Noble catalog of commercially available ebooks is less extensive and more expensive (once we get beyond those $9.99 bestsellers) than that in the Kindle Store.

The Nook May Boost Kindle Sales. The biggest advantage that Barnes & Noble has in the ebook wars is the fact that it can market the Nook in its 1,300 stores, which, when you think about it, is a lot like Amazon's ability to market the Kindle front and center and all over its website for the past two years. Customers who walk into a Barnes & Noble store beginning in late November will be able to leave with a Nook if the company's marketing tactics seal the deal. But that's not exactly a lead-pipe cinch. $259 gadgets do not constitute impulse buys for most bookstore visitors, especially in these times, and for the majority of visitors who leave the store thinking about the Nook without actually having bought one yet, the research that they will do -- online, in most cases -- when they get home may well lead them to buy a Kindle.

There's an awful lot that Amazon is doing right with the Kindle, but not everything. And if we didn't know already, the events of the Nook's launch week would be enough to prove that Kindle customers benefit when Bezos, Amazon, and the Kindle team have to hustle.

There's no guarantee that what I am about to say will last, and a few fundamental branding mistakes could create a serious undertow here, but for the present the Kindle seems to be riding a wave on which every new development that comes along drives customers and traffic toward the Kindle and the Kindle Store. If someone is really committed to buying from Barnes & Noble, perhaps that person will buy a Nook. But for most everyone else, the very existence of the Nook, like the existence of the various Kindle Apps (which will soon include not only the iPhone and iPod Touch but also Windows, Mac, and Blackberry), will boost Amazon's numbers for Kindles sold, Kindle content sold, titles available, and platform share.

What do you think?

If you were planning to buy another ebook reader either for yourself or as a gift for the holiday season, which will it be? The Kindle or the Nook? Or are you on the fence. or considering another ereader?