Last year’s Nook Color caused quite a bit of wave in the tech world, not just because it was a color reader, but because it was also a quality tablet that you could have for the low price of $250, and then you could install Android on it. Later some companies even offered to do it for you for $35. When 3rd party companies like that show up to make products or services specifically for your own product, you know your product is a success.

Almost a year after the Nook Color launched, according to a new report from Taiwain, we should be expecting Nook Color 2 to launch sometime this month. We don’t know too many details, except that it will also have a 7″ display. TPK Holdings has been assigned to manufacture the display panels for the Nook Color 2, which is the same company that will make 70-80% of the displays for Apple iPhone 5, while Inventec will handle the assembly of the product.

One interesting aspect about this rumor is that E-ink is also providing e-paper backplates for the Nook Color 2. Either this is a confusion, and E-ink is actually privinding those for B&N’s Nook reader, or B&N will try to turn Nook Color 2 from an LCD reader into a color e-ink reader. But if that’s true, this may kill Nook Color’s appeal as a tablet, and people would only consider it a “reader”, even though it will now be a color one, but still a small upgrade compared to the lack of functionality the Nook Color 2 would lose if it switched from LCD.

If they actually wanted to make a Nook that is based on e-ink color, they should upgrade their normal Nook to it, which would make more sense. Originally, it had no color, and eventually it gets color, but it’s still the same e-ink technology, so people using that will be thrilled with getting color on the next-generation of the Nook reader.

Another option would be to make a new brand for this type of device, in case the color e-ink has some disadvantages like higher price, or higher power consumption, and so on. It would be best if it existed in its own product category with its own brand, because they would be pretty different products with different benefits.

So I don’t think that rumor is true, because it doesn’t sound very smart to do that, but either way we’re going to see it this month, according to the rumor, and we can handle to wait a little bit more to find out the truth.