By Chris Velazco
Barnes & Noble (NYSE:BKS) seemed pleasantly surprised when they announced their Nook Tablet “exceeded expectations” over the holidays, but their 70% year-over-year jump in device sales paled in comparison to rival Amazon’s 177%.
That their flagship Nook Tablet cost a full $50 more than the Kindle Fire certainly didn’t help, but that should change soon — according to a document obtained by The Verge, Barnes & Noble will release a new 8GB version of the Nook Tablet on February 22.
While the original Nook Tablet sported 16GB of onboard memory, the new version will feature the same amount as the bestselling Kindle Fire. A decrease in memory capacity also signals a corresponding dip for the price tag, which means that BN is looking to take Amazon on at their own game. It’s a smart, if possibly-overdue move for BN — Amazon has already been playing up their price advantage with a national marketing campaign, and while it targets the iPad specifically, the message still applies to BN’s slightly pricier tablet.
Still, I wouldn’t expect the price break to be a panacea for the book retailer. If the new model Nook retails at or around the $199 price point, purchasing decisions may well come down to the strength of the ecosystem behind the device, an arena where Amazon (NASDAQ:AMZN) has the edge. The Kindle Fire isn’t so much a tablet is it as a portal to the rest of Amazon’s media ecosystem, and the included Amazon Prime trial grants access to faster shipping in addition to streaming video content.
That’s not to say that the Nook Tablet is a slouch — John considers it a better device for handling content and media on the device itself — but BN will have their work cut out for them regardless.
While Amazon and BN continue to slug it out for the low-cost tablet crown, they should also be mindful of their flanks. With devices like the 7-inch Tegra-powered Asus MeMo tablet barreling down the pipeline, the bar for device performance may shift in a way that Amazon and BN aren’t prepared to compete with yet.