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Kindle 2G vs NookIt was only a matter of time. Amazon will be introducing a 14-day lending feature for Kindle ebooks later this year, the Kindle team announced yesterday. The move brings the Kindle up to date with Barnes and Noble’s rival Nook e-reader, which has touted 14-day book lending as a key feature since it launched last year.

Just as with the Nook, Amazon says you won’t be able to read ebooks while they’re lent out. The feature won’t be available for all ebooks either, as it will be entirely up to publishers and rights holders to enable it.

It remains to be seen if Amazon will innovate beyond Barnes and Noble with the feature. Amazon CEO Jeff Bezos last year criticized the Nook’s book lending implementation as being “extremely limited”, so I suspect the company has some ideas in mind to differentiate the Kindle’s sharing. At this point, the Kindle seems just as limited as the Nook.

What does book lending on the Kindle mean for the Nook? With the feature matched by the Kindle, all the Nook has to differentiate itself now is its superfluous secondary color touchscreen. Sure, it supports expandable storage via MicroSD cards, and it also can read DRM-free ePub ebooks (unlike the Kindle) — but those aren’t exactly features that can combat the widespread name recognition of Amazon’s device.

Barnes and Noble tried to one-up Amazon earlier this year by introducing a WiFi-only Nook for $149, and reducing the price of the Nook 3G to $199, but Amazon fired back a month later with its revamped third-generation Kindle at $139 and $189 price points. While Amazon doesn’t divulge exact Kindle sales numbers, the company noted in its third quarter earnings report that strong sales of the new e-reader model led to significant revenue and profit gains. Barnes and Noble maintains that it has 20 percent of the ebook market and that sales of the Nook have been strong, despite missing analyst estimates in its recent second quarter earnings.

Barnes and Noble still has the advantage of using its retail stores to push the Nook, but Amazon matched that as well by bringing Kindles to Best Buy and Target stores in September. At Best Buy, Kindles are now displayed alongside Nooks and other e-reader devices, and I can’t imagine why anyone would choose the Nook over the Kindle in its current form. The Kindle hardware feels more refined, and it has a more complete ebook library with over 630,000 books versus the Nook’s 166,000 (Barnes and Noble advertises having over a million ebooks, but it’s including nearly a million free public domain ebooks in its figures which are also supported by the Kindle). Amazon has even released an SDK so that developers can create Kindle applications.

I recently picked up a third-generation Kindle, and I’ve noticed that many other e-reader holdouts — both among my circles and general users — are doing the same. The $139 price point is working wonders for Amazon, and it’s also part of a gradual move towards $99 pricing — at which point e-reader adoption will see new heights. Perhaps Barnes and Noble will attempt that lower pricing first (once again), but it can only drop the price so far before it becomes unfeasible.

Despite the release of the iPad, and the promise of even more tablets to come, there definitely seems to be a demand for low-cost portable devices dedicated to reading. I’m certain the Kindle will remain a dedicated presence in the market for some time, but at this point I’d have to say that the Nook’s days are numbered. For Barnes and Noble’s sake, I hope that rumors of a color Nook are more fact than fiction.

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