New Barnes & Noble’s Nook e-reader knocks on Amazon Kindle 2’s door

Amazon has a head start in the e-book reader space, but its competitors are lining up to bat. Sony, Spring Design and now Barnes & Noble are all looking for market share in that burgeoning space and most of their innovation seems targeted at adding more functions to a device like the Kindle 2 that’s highly specialized in displaying books.

Barnes & Noble is chained to the Kindle 2’s pricing as a later “me too” entry into the market. Its Nook e-reader will launch in late November for $259. Like the Alex from Spring Design, the Nook adds a smaller color touchscreen to the bottom of its case which it hopes will pull in people looking for easier navigation and more from a device than just reading books. The Nook will run Google’s Android operating system which connects the device to a large group of developers creating new applications and functionality every day. Good stuff, but what truly sets the Nook apart?

It’s an ability no other e-book reader has right now: sharing books with friends electronically. The community aspect of reading a paperback book is an important part of the culture because it’s so easy to say “I loved that book, would you like to borrow it?” Barnes & Noble leveraged its relationships with publishers to pull allow that functionality and right now it’s limited to a small scope of books that can be lent out once for up to 14 days.

Interestingly from a performance perspective it looks like the Nook suffers from a bit of lag during navigation, which is evident even on Barnes & Noble’s demo video.

Barnes & Noble has a ways to go though considering Amazon has a 60% market share in the U.S. e-book reader market, followed by Sony with 35%, according to Forrester Research. It’s off to a good start with a device that offers more functionality for the same price as a Kindle 2.