[Xyxox]

I've been wanting an eReader for a long time, but have been holding off as I have watched the market.

The eBook market is at a critical juncture right now. The timing is comparable to other junctures in other technology markets, such as Betamax vs. VHS, Windows vs. Mac, HD format vs. Bluray.

I am watching the next six weeks closely and will be making my decision based upon the events in the next six weeks. There are some critical issues, both at Amazon and at Barnes and Noble.

Without a doubt, from a technology standpoint alone, the Nook is positioned as the premier technology for an eReader. Basing it on Android was a good move, and adding a dual screen with one as a touch screen positions it as the highest tech eReader on the market.

Technology alone never wins these battles, though, as any Betamax or Mac proponent can tell you.

The next moves by both Amazon and B&N will drive the direction of the eBook market for the next five years.

Nook has three major issues:

1) Gift certificates cannot currently be used for eBooks. This is a huge issue and must be addressed before launch or the Nook will fail.

2) B&N is touting over 1 million titles, however, 500,000 of these are free titles from Google books. The free content from Google can be easily converted to Amazon's proprietary format so this is not a big selling point. The rest of the promise is currently vaporous. Doing a search on authors, etc., I find more titles currently available on Amazon than on B&N. This is a huge issue which must be addressed before launch or else Nook will fail.

3) Pricing is a major factor against Nook. Looking at current costs of eBooks alone on B&N and Amazon, there are a few titles where cost is identical but overall, B&N is priced anywhere between 11% and 150% higher than Amazon depending upon the title. This is a huge factor that must be addressed before launch or else Nook will fail.

From Amazon's viewpoint, there are several issues and they are all related to technology.

1) A wider set of format support exists on Nook. The open EPUB format is supported by Nook but is not really supported by Amazon, especially where DRM is involved. This is a factor that plays against the current market leader.

2) Android as the base OS of the device gives the Nook an advantage over the Kindle for flexibility and ease of upgrades as well as future application support. This must be addressed in the next year or else Amazon risks their market leading position.

3) The wireless features of the Nook exceed those of the Kindle. Amazon should address this in the next version or risk their competitive advantage.

The "loan a book" feature of the Nook is more hype than reality currently. You can only loan a book once for 14 days, and then can never loan it again. Furthermore, publishers and authors can deny this functionality, so not all books will be loanable. It's a niche that nobody has addressed yet and could become a competitive advantage for B&N in the future, but right now it's not a major concern.

For the future I see many possibilities, but there are some key actions required of both B&N and Amazon if they are to really compete.

For B&N, they must get gift certificate application to eBooks in place in the next 37 days. They must insure their claims of 1 million titles are realized, including 500,000 titles for sale. They must reduce the cost of eBooks across the board and should position themselves 10% lower than current Amazon eBook pricing if they expect to have a real impact. Technology alone will not and cannot win this war, and make no mistake, this is a war for the eBook space.

For Amazon, they can buy themselves a year by lowering all eBook prices by 20% across the board standard for the foreseeable future. From there, they have to address the technological advantages of the Nook. They can kill any competitive advantage the Nook could gain from Christmas sales by targeting price drops of eBooks further through JAnuary and heavily advertising the fact that gift certificate purchases will be able to buy eBooks at 25-50% off through the end of January, thus quickly moving that money off the books in 2010.

That's how I see it, any way. I'll be purchasing a device by December 12, depending upon how the two players act. I discount Sony completely based upon how they;ve acted in the marketplace and the current cost of content.