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B&N Comes Down To Kindle Fire’s Level With 8 GB, $199 Nook Tablet

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Hoping to compete against the $199 Kindle Fire, Barnes & Noble (NYSE: BKS) has a new $199 tablet, the not-so-catchily-named Nook Tablet–8 GB.

With the release, which coincides with Barnes & Noble’s Q3 2012 earnings report this morning, the company drops the older Nook Color’s price to $169. The Nook Tablet–16 GB, released in November, remains $249.

The launch of the $199 device is a sign that Barnes & Noble is struggling to compete against Amazon’s Kindle business. At the Nook Tablet’s November launch, B&N CEO William Lynch stressed that the Kindle Fire is “deficient” and that customers should choose the Nook Tablet because it offers more storage, a faster processor, more third-party entertainment and a better display.

Yet shoppers have not been convinced. So Barnes & Noble is trying a price drop. The new 8 GB Nook Table matches the Kindle Fire in terms of storage and processor RAM (512 MB on both the Nook Tablet 8 GB and the Kindle Fire, compared to the Nook Tablet 16 GB’s 1 GB of RAM). Barnes & Noble would presumably say that the display is still better, but in terms of third-party entertainment the Nook Tablet and Kindle Fire are quite comparable, with both offering Netflix (NSDQ: NFLX), Hulu Plus, Pandora (NYSE: P), Rhapsody and Flixster.