E-readers become more like tablets with access to Android store

by Morgan Phelps

Barnes & Noble (BKS) is hot on Amazon’s heels once again with its announcement Monday that it will add Android store access for all Nook Color users, just one week after Amazon launched its own Android app store. And as the two e-reading companies compete closely in the same space, they are also crowding the tablet PC market with these efforts, especially since the iPad 2 does not have Android Market access.

Since Amazon (AMZN) launched its app store, rumors have swirled that the company is developing a new version of the Amazon Kindle e-reader that will be more like the Nook Color and will use Android as its operating system. Amazon CEO Jeff Bezos said in 2009 that the company was “multiple years” from coming out with a color Kindle, so the development of such a device may not be far off.

After launching the Nook Color in October, Barnes & Noble reported sales of 1 million units in the fourth quarter, while Amazon anticipated sales of approximately 8 million Kindles of all types for all of last year. Digitimes has reported that the $250 price tag for the Nook Color has helped it capture more than 50 percent of the iPad-like market in North America, which is undoubtedly encroaching on Amazon’s Kindle territory as well.

Amazon has a slight advantage in that its app store allows users to try apps before they buy them with its Test Drive feature. Users are able to test out Android apps in their browser with a full-fledged recreation of the Android virtual machine, which runs just like an Android phone. But with the Nook Color’s addition of the ability to play Adobe (ADBE) Flash content in websites, which will make it possible for users to stream video and play games, Amazon seems to have a further trip to make to compete in the tablet PC space than Barnes & Noble does.

Instead of crying over spilt e-ink, both Barnes & Noble and Amazon have the opportunity to capitalize on their lower price points to overtake the iPad and other tablet PCs in the market. The Nook may be lapping the Kindle for now, but the race to tablet PC domination is far from over.