• by Mark Walsh  @markfwal, May 24, 2011

Amazon may be far ahead of rivals in the e-reader market, but Barnes & Noble is putting the heat on with recent moves in the space. The latest is today's unveiling of a new Nook device that uses the same E-Ink technology found in the Kindle, combined with a touchscreen that does away with the control buttons of earlier models. Selling for $139, it also matches the price of the standard Kindle device.

With the new Nook, Barnes & Noble is ready to go toe-to-toe with Amazon in offering a basic, six-inch e-book reader while also selling the tablet-like Nook Color with its wider range of functions. Barnes & Noble's strategy spans both ends of the e-reader market, while Amazon has yet to even roll out a color device.

Initial hands-on reviews also suggest the "All-New" Nook matches up well with the Kindle. Engadget called it "a sexy piece of hardware," lighter than its predecessor and featuring a soft-touch rubber surface instead of hard plastic. The BGR blog also hailed the upgraded Nook as a big improvement, noting "it will definitely push Barnes & Noble even further in the growing e-reader space, and it should have the team over at Amazon working overtime on its next Kindle design."

The Nook release also comes on the heels of Kobo yesterday announcing a similar E-Ink e-reader for $129, signaling heightened competition in the device category long dominated by the Kindle. But Barnes & Noble is also pushing Amazon with a crossover device in the upgraded Nook Color launched last month, with apps, games, Flash and other new features. The book chain earlier this month also released an updated Android app that gives users access to a newsstand of 140 digital magazines.

In the wake of the Nook Color's release (and that of the iPad 2), rumors have picked up that Amazon is preparing to introduce its own tablet. Asked about that possibility earlier this month, Amazon CEO Jeff Bezos told Consumer Reports to "stay tuned."

Bezos has long championed the virtues of a single-purpose reading device over a media tablet. But growing consumer uptake of tablets and devices like the Nook Color may be forcing him to alter his outlook -- and perhaps open a new chapter when it comes to hardware.