Barnes & Noble introduced the Nook Color primarily as an e-reader in October of last year. Although Barnes & Noble expressed no intent on expanding Nook as a full-fledged general use tablet, modders soon rooted the device and loaded customized Android versions to run third-party applications.
Recognizing Nook Color's tablet potential, Barnes & Noble in April issued a software update that officially got the device Flash support, games such as Angry Birds, built-in email, multimedia e-book features and new social networking and Web tools. The April update to Android 2.2, code-named Froyo, also provided performance improvements.
Nook products are becoming more important for Barnes & Noble as e-book sales grow and the company scales back retail store operations. Barnes & Noble in September said that while retail store sales represented a bulk of the company's business, consumer spending was trending toward digital content, which was defining the company's direction.
In June, Barnes & Noble said it was selling three times as many digital books through its website compared to physical books. As of September, the company had 1,300 retail stores, which were a "major competitive asset" in boosting digital content and device sales.
Barnes & Noble's Nook products also include the Nook Simple Touch Reader, which is priced starting at $139, and the original Nook, which started at $89. Barnes & Noble offers 2 million e-books for download, according to the company's website.
Barnes & Noble's top e-reader competitor is Amazon, which offers Kindle e-readers. E-reader shipments totaled 5.4 million units during the second quarter this year, growing by 167 percent compared to the same quarter last year. Amazon was the top e-reader vendor with a 51.7 percent market share, while Barnes & Noble held a 21.2 percent share in the second quarter. IDC expects worldwide e-reader shipments to total 27 million units this year.
(Agam Shah in New York contributed to this report.)