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Summary:

Barnes & Noble announced a $199 version of its Nook Tablet on Tuesday with half of the memory and storage of the current $249 model. B&N is taking aim at Amazon’s $199 Kindle Fire, but it doesn’t have a full-featured ecosystem to compete with.

Recent rumors of a lower-priced Nook Tablet have turned into reality as Barnes & Noble announced a $199 tablet on Tuesday. The lower-priced model is nearly identical to the current $249 Nook Tablet; the only differences are internal as the slate has half of the memory and storage of the current model. Barnes & Noble also dropped the price of its Nook Color from $199 to $169.

The $199 Nook Tablet comes with 8 GB of storage capacity and 512 MB of RAM; both of which are half that of the $249 model. However, the cheaper tablet retains the same display, processor and quoted 11.5 hour battery life. Clearly, this less expensive version is Barnes & Noble’s way of competing against its primary competition: Amazon’s Kindle Fire, which is also priced at $199.

Thanks to low prices, the Nook and Kindle Fire accounted for a whopping 21 percent of the overall tablet market in the final quarter of 2011. But Amazon took two-thirds of that 21 percent, meaning Kindle Fires outsold Nook Tablets by a margin of 2 to 1. The $199 price-tag of the Fire may have contributed as Amazon offered a lower-priced device, but that’s not the whole story.

Even at the same $199 price, Amazon’s Kindle Fire is still likely to outsell the Nook Tablet because Amazon offers a stronger ecosystem. Both slates have curated app stores and their own virtual shelves of digital books and magazines, but Amazon also has a store for digital music and videos. Barnes & Noble is completely reliant upon third-party services such as Netflix, Hulu Plus, Flixster, Pandora, Rhapsody, Grooveshark and MOG. Plus, the Kindle Fire is a window to the endless mall of physical goods that Amazon sells.

The Nook Tablet is a great device — see my review here — and at $199 will surely get more looks from consumers, especially those that prefer the overall hardware. But for now, the Nook Tablet needs more than a price cut to heat up the competition because price alone isn’t good enough to become a leader in today’s tablet market.

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  1. Should be interesting to watch what happens to Kindle Fire when Android tablets start beating iOS tablets for market share.

    On one hand, Amazon can run Kindle Fire as a loss leader, giving it a huge advantage in the market.

    On the other, Google can withhold (as they now do) their core apps from Amazon’s app store, and they can deny Kindle Fire users access to the main Android Market.

    There should be some very interesting discussions ahead between Bezos and the Google kids.

  2. Roshan Shrestha Tuesday, February 21, 2012

    If it only had a front facing camera (a lowly 1MP is good enough) and a microphone, I would definitely buy one. BN definitely should have added these options to take on the Kindle fire.

    1. I’ve been wishing more for GPS. Bluetooth support would be nice as well.

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