* E-reader available for pre-order at $249
* Offers wi-fi web browsing; to start shipping in Nov.
* CEO said has sold "well over" 1 million Nooks so far (Adds CEO, chairman, analyst comments, byline)
By Phil Wahba
NEW YORK, Oct 26 (Reuters) - Barnes & Noble Inc (BKS.N) unveiled the latest iteration of its Nook e-reader, featuring a color touch screen and Wi-fi web browsing, as it seeks to catch up to industry leader Amazon.com's (AMZN.O) Kindle in the race for market share in the growing digital books arena.
The Nookcolor, built on Google Inc's (GOOG.O) Android operating system, is now available for $249 for pre-order online, or at Barnes & Noble stores starting on Wednesday. The product will begin shipping around Nov. 19.
The largest U.S. bookstore chain launched the first version of the Nook a year ago and struggled with production snafus and delays in the device's first months, but the device has emerged as a serious contender.
The price for the earlier Nooks start at $149. Barnes & Noble Chief Executive William Lynch said at the product launch in New York that the company has already sold "well over" 1 million Nooks so far and said that could quickly double.
Barnes & Noble, which has contended with years of sales declines in physical books, is staking its future on its ability to adapt to digital bookselling. It has committed $140 million to developing the Nook this fiscal year.
Forrester Research analyst James McQuivey said that Amazon's decision not to include in the Kindle touch screen functions like those found on Apple Inc's (AAPL.O) iPad computer tablet -- which includes e-reader capabilities -- has given Barnes & Noble an opening.
"The big holes left in the market ... are the gap between today's e-readers and the Apple iPad," McQuivey said, noting that e-readers will have to function as lightweight tablets to pull ahead of rivals. The Nookcolor weighs less than one pound.
McQuivey said that as a bookseller with brick and mortar stores, Barnes & Noble had a built in advantage over a rival like Sony in selling its e-readers.
"Nook has been successful because Barnes & Noble brings book buyers through its doors every day," he said.
Forrester Research estimates that Barnes & Noble will have sold 2 million Nook devices by the end of 2010, closing in on Sony Corp's (6758.T) Reader for second place.
But that is still far behind Amazon, which Forrester expects to sell 6 million units, with a U.S. e-reader market share greater than 60 percent.
Barnes & Noble, which last month won a proxy fight with dissident shareholder Ron Burkle and put itself up for sale in August, is hoping the company will be more valuable because of the new Nook.
"The value is obviously the growth component, not in the component that's been going sideways for years... Investors are going to want a growth story," chairman and founder Leonard Riggio told Reuters on the sidelines of the launch.
Riggio said there was no news on the sales process, adding that it had just begun.
Forrester estimates 10.3 million e-readers will be sold in the United States marketwide by year's end. That figure is expected to reach 15.5 million by the end of 2011. The average e-reader owner spends about $60 per year on e-books. (Reporting by Phil Wahba; Additional writing by Martinne Geller; Editing by Bernard Orr)