Don't Bury the e-Readers Just Yet

Stop and blink these days and you may miss the evolution of e-readers.

Over the weekend, Amazon.com (Nasdaq: AMZN  ) announced that it would allow e-book sharing on Kindle purchases later this year.

Just as bibliophiles pass on praise-worthy paperbacks to their friends and co-workers, Kindle owners will soon be able to temporarily fling a digital purchase to someone else's Kindle.

There are a few catches, naturally. Publishers need to approve the digital mooching. Just as in the real world, both readers won't be able to access the book at the same time. Unlike the real world and its forgetful borrowers, the digital hand-me-downs will only be active for two weeks.

It's a win-win deal. Publishers may lose a few sales this way, but it may also help promote of the writers on their roster. Kindle owners will have one less reason to envy old school page turners -- and save some money along the way.

Borrowing books and ideas
Amazon isn't planting the flag here. Barnes & Noble's (NYSE: BKS  ) Nook has been offering 14-day sharing of purchased titles since last year's launch.

Virtual sharing hasn't been much of a game changer in the past. Microsoft's (Nasdaq: MSFT  ) Zune initially turned heads for its music-sharing feature. Unfortunately, you need a large base of users for any social function to go viral. Zune's distinctive ability to pass on songs for a few complimentary listens hasn't helped. Apple's (Nasdaq: AAPL  ) iPod continues to command more than two-thirds of the portable media player market.

It hasn't gone much better for the Nook. Amazon and B&N haven't revealed hard sales data on their gadgetry, but it's widely believed that the Nook is -- for now -- a small player in this growing field.

That could be about to change.

Wal-Mart (NYSE: WMT  ) begin selling the Nook through many of its stores over the weekend. Having a presence in the world's largest retailer is impressive, especially since Barnes & Noble competes with Wal-Mart in the sale of traditional books.

We also have to see what B&N has up its sleeve tomorrow. A media event is scheduled, and all signs point to a refreshed Nook line on its first anniversary.

I know. I was skeptical, too. However, I think I'll give B&N the benefit of the doubt for the next 24 hours.

B&N may be raising the bar, and this time in a more meaningful way.

Children are our future?
This morning's Wall Street Journal details the bookseller's plans to soon offer 12,000 kid-friendly chapter books and dozens of picture -- and enhanced picture -- books.

It's at this point where you may want to check out NookKids.com. Play the video, where Bruce Degen's classic Jamberry picture book comes to life. It's colorful. The "read to me" feature is richly narrated and whimsical. Perhaps more importantly, certain pages have interactive buttons where games and activities can be initiated.

Colorful and interactive experiences aren't common with entry-level e-reader gadgetry. This is something you will find on the high-end through Apple's iPad or on the low-end with dedicated playthings by LeapFrog Enterprises (NYSE: LF  ) .

Is B&N about to roll out a new Nook that will offer the best of both the tablet computing and e-reader realms? If so, will it even be possible to stick to its predecessor's $149 and $199 price points?

We'll see.

Keep in mind that just as Amazon.com didn't originate digital sharing, B&N isn't the first one bringing children books to life.

Apple's iPad bookstore comes with a complimentary Winnie the Pooh classic in its colorful splendor. Amazon.com also opened the door for publishers to put out multimedia releases this summer -- but not through its Kindle reader. Amazon's multimedia features are available through its App Store app on Apple devices (and other graphically compatible devices).

If B&N is simply initiating minor Nook tweaks and launching an Amazon-esque multimedia platform for third-party devices, the market will rightfully yawn. Nook will be back to fighting against Sony (NYSE: SNE  ) for the scraps that Amazon.com and Apple leave behind.

However, if B&N is breaking out a tablet-esque e-reader at a tempting price point the holidays are about to get a lot brighter for a beleaguered retailer that can use the good news.

I can't wait to see how the next chapter plays out.

Does the Nook have a chance? What will Amazon.com do if B&N raises the bar tomorrow? Share your thoughts in the comment box below.

Wal-Mart Stores is a Motley Fool Inside Value pick. Apple and Amazon.com are Motley Fool Stock Advisor recommendations. The Fool owns shares of Apple and Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz owns a Kindle and an iPad, but he uses his iPad a lot more. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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  • Report this Comment On October 25, 2010, at 6:44 PM, rfaramir wrote:

    "There are a few catches, naturally. Publishers need to approve..."

    This is why it still isn't good enough. If I purchase a book, it is my property, and I can loan it to whomever I wish without getting the approval of the publisher.

    I have bought exactly one e-book, loved reading it, but immediately wanted to pass it on to friends for them to enjoy, too. I couldn't. I may never buy another DRM-protected e-book. I may buy unprotected e-books, and I'm already downloading old books and have a backlog of classics to go through. But new and DRM-limited? No thanks.

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