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Barnes & Noble Seen Launching Kindle Rival

Barnes & Noble may be gearing up to enter the e-reader market, joining Amazon's Kindle 2 and Sony's Reader family in an increasingly competitive arena.

The book retail giant is working with a device-maker and Sprint on its own answer to the Kindle, according to TheStreet.com, which cites an unnamed wireless industry insider.

The move would continue Barnes & Noble's (NYSE: BKS) aggressive moves into the digital book space, an industry that's become closely watched and increasingly competitive with the debut of Amazon's popular e-book reader, the Kindle.

Amazon's two-month-old revamp of its product, the Kindle 2, sports a number of design, storage and battery life enhancements and was followed up with the announcement of a free, Kindle-compatible e-book reader for the Apple iPhone and iPod Touch, downloadable from Apple's (NASDAQ: AAPL) App Store.

If Barnes & Noble is planning a similar strategy of its own, however, it's keeping quiet. Spokespeople for the company would only reiterate comments made by CEO Steve Riggio during a recent earnings call.

"We plan to return to the business of offering customers digital content inclusive of e-books, newspapers and magazines," Riggio said during last month's call. "We have a large number of assets in place to enable us to sell digital content, our e-commerce platform is solid and scalable, we operate a world-class in-house customer service center.

Still, the company's investing in the e-book segment. Barnes & Noble recently acquired Fictonwise, which makes e-reader software for devices like the BlackBerry, and said it plans to use the firm as part of its overall digital strategy, which includes the launch of an e-book store later this year.

"Fictionwise has enhanced our ability to conduct digital transactions," Riggio also said during last month's call. "Of course, we understand investors are anxious to hear more specifics about our plans in this arena, we do have a wide range of initiatives in development but due to the highly strategic nature of this fast evolving market, we will announce each of them as they launch."

Mounting a challenge to Kindle

If reports are true and Barnes & Noble plans to bring a full-fledged Kindle competitor to market, its success will hinge on having a seamless user experience similar to Amazon's (NASDAQ: AMZN) Whispernet, said Mike McGuire, media analyst at Gartner.

Kindle's Whispernet wireless access utilizes Amazon's optimized technology plus Sprint's 3G data network so that readers can shop online or download new content without paying for it or having to find a Wi-Fi hot spot.

"The key is having the service tied to the device with a wireless network. They will have to make it a uniform single service that is a seamless experience for the consumer. Kindle did good job with this because of its Whispernet, wireless technology -- the user just registers and starts buying," McGuire said. "They will need to be sure users don't have to worry about whether or not they're a Sprint subscriber, or about assembling different parts."

Amazon and Barnes & Noble aren't the only competitors poised to battle it out in e-books. Sony and Google just partnered up to bolster Sony's digital reader division, which several years ago began offering Kindle-like e-readers and an e-book store.