Microsoft Enters the eReader War....On Barnes and Noble's Side.

From as early as two months ago, speculation was rife due to talks between Microsoft's CEO, Steven A. Ballmer, and Barnes and Noble CEO, William J. Lynch Jr, as to whether Microsoft would be playing a part in the expansion of the eBook market. Currently two giant tech companies, Amazon, and Barnes and Noble, dominate the eBook market with roughly 60% and 25% market share respectively.

Amazon however, vastly controls the eReader market due to the popularity of its Kindle line of eReaders, partly due to the fact that they sell at a loss in order to move more eReaders. While the B&N Nook does hold a significant share of the eBook market due to its adoption of the widely popular EPUB ebook format, its sales pale in significance compared Amazon's simply because there are far more Kindle users than there are Nooks, and Amazon has the biggest Kindle-compatible bookstore in the world. 

From a technological perspective, after the release of the first generation Kindle, B&N always got their new Nook product out first, from Touch to the Glow. Despite their competitor's earlier release, Amazon has managed to catch up and in most instances, surpass B&N sales due to its superior marketing and sales strategy (undercut competitors, underprice eReaders and recoup losses selling eBooks at bulk).

Now that Microsoft has poked its head into the market, things will change very dramatically. In fact:

Mr. McQuivey said he expected that Barnes & Noble would eventually create a new line of Nook devices based on Windows 8 that will offer a closer marriage of hardware, software and content services. (1)

Certain pundits have claimed that Nook will be using Windows software for the newer Nooks. Whether that will out to be a good thing remains to be seen. Microsoft has had a horrid track record regarding software integration with the hardware of its allies (Nokia/Lumia ), causing major bugs such as the "unable to end call" and "increased battery drain" bugs which as of now, have yet to be fixed.

We speculate that the black/white traditional ereaders will continue to use the open-source Android platform whereas the tablets will move on to more customized OSes, such as Windows to attract fans of Microsoft software to buy their tablets. However, Black and White eReader will always dominate market for novels, at least for the current of readers who can fondly recall reading their "dead-tree books".

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Source:
(1) http://dealbook.nytimes.com/2012/04/30/microsoft-deal-adds-to-battle-over-e-books/?hp