Barnes and Noble Feels the Pressure, Drops Nook Tablet Prices

Barnes and Noble recently sent out an email announcing that they’ve lowered the prices on all the Nook Tablets (including the Nook Color): The 16GB Nook Tablet is now $199, the 8GB Nook Tablet is $179, and the 8GB Nook Color is $149.  This is good news for anyone considering a Nook Tablet, but is the price drop enough to sway people currently considering an Amazon Kindle Fire at $199? And what about competition from tablets like the Google Nexus 7 or Apples (still rumored) 7-inch tablet, will this price drop do anything to bolster Nook sales on the face of their rising numbers? 

Recent Review

If you read my recent full review of the Barnes and Noble Nook Tablet, you’ll note that most of the review’s conclusions remain the same, although my recommendations change somewhat: While Barnes and Noble’s Nook app market is still anemic, the tablets are now well priced, and I’d recommend them to anyone considering a tablet mostly used for reading. At $179, the 8GB Nook Tablet should definitely be one you consider: it’s cheaper than the Kindle Fire and includes a MicroSD memory expansion port. At $20 more, the $199 16GB Nook now becomes the default option when considering a Nook, and at that price, I don’t think you can go wrong. (Because of its weight and laggy performance, I’d still recommend you avoid the Nook Color, unless you’re on a very tight budget.) Unlike the Amazon Kindle Fire, you still have face-to-face support in the Apple-inspired Nook kiosk lording over the entrance of most Barnes and Nobles, and the current generation of Nook Tablets will obviously be supported by Barnes and Noble for some time to come.

Barnes and Noble Announces New Nook Prices

Of course, this move is ostensibly a response to competition now that consumers have more options at the $250 price point, like the Google Nexus 7 Tablet, and the $199 price point is being eaten up by Amazon’s Kindle Fire. But is there more to this move?

How this will affect any future releases (likely in November, though maybe earlier) of the next Nook Tablet line is anyone’s guess: will they continue their tradition of starting at the $250 price point, or has competition and technology reached a point where $199 is a must for a tablet aimed at readers?

Versus the Amazon Kindle Fire

Barnes and Noble was there first: first reader, first tablet. Amazon came in later, sometimes looking as if they had done more than taken a page from Barnes and Noble’s book (albeit with better marketing). But the Amazon Kindle Fire and the Barnes and Noble Nook aim to please audiences in very different ways.

Barnes and Noble aims to please audience with face-to-face service, great hardware and lots of onboard memory, a reader-centric interface, a curated market, in-store freebies, and a focus on kids, with, for example, the ability to record yourself reading a story for your kids.  Your purchases (books, magazines) can be downloaded from anywhere with a WiFi connection, and are stored in Barnes and Noble’s servers in perpetuity (or as long as the company agrees to keep up the service), where you have unlimited space for Barnes and Noble digital content purchases.

Amazon aims to please its audience by focusing on their strength: the vastness of their market and their cloud services. To that end, they offer you 5GB free on their servers for you to store music, books, and other items you upload your computer, and unlimited space for you to keep all the digital media you’ve bought from them: movies, music, books. While Barnes and Noble focuses on readers (and does well with the Netflix and Hulu Plus crowd), Amazon caters to all your interests. The hardware is not as good as Barnes and Noble’s (the Kindle Fire has 8GB of on-board storage, and no memory card expansion slot, plus the device is notably heavier and not as comfortable to hold), but they make up for that by having great services, a large app market, tons of freebies like free MP3 and movie credits, and the Amazon Lending Library, where you can “check out” Kindle books and read them for free. OK, so that last one is only for Amazon Prime members, really, but if you own a Kindle Fire it’s hard to justify NOT becoming a Prime member.

Advantage Amazon.

Now, Barnes and Noble doesn’t offer a bad product at all, and it’s well suited for its business.  For example, I think BN is doing the right thing by allowing users to expand the memory on their devices, while Amazon basically forces users to use the cloud. But given the competition, it’s a good idea to at least price hardware appropriately.  It might also be a good idea for the company to revisit its indie author programs, and while that plays a role into the popularity of the Kindle line, it’s something I’ll explore later.

Amazon Fire vs Google Nexus 7 vs Barnes and Noble Nook

 

Versus Other Tablets (Google, Apple, etc.)

Recently, Google released their Nexus 7 tablet, pricing its 16GB model at $250, and its 8GB model at $199. This is a full featured tablet with a front facing camera, a great screen, and a whole lot of kick, not to mention the latest version of Android, with its hundreds of thousands of apps, including the Barnes and Noble Nook app. On that same note, Apple is expected to announce a 7-inch iPad (which I’ll call the iPad Mini) sometime around September 12th, pricing it somewhere between $199 and $299. And, of course, that, too, has the Nook app.

So at the old $250 price point, why would anyone choose a Nook over a Nexus or an iPad Mini? In-store service? (Something Apple already offers, and which Barnes and Noble all but copied wholesale.) The ability to read any book, in-store, for an hour? Friday Freebies? Are they really worth that much to anyone?

The fact is that at $250 there would be no reason for you to choose a Nook over a Nexus 7. (No word yet on the Apple front.) At $199… that’s a maybe.

Both BN and Amazon have been experiencing competition from inexpensive, quality tablets. (For example, I currently own a HTC View which cost me $239 when I bought it 8 months ago, and has expandable memory and a faster processor than the $250 Barnes and Noble Nook.) Amazon struck first by pricing their tablet at $199, which they previously sold at a loss. (They make their money back by hooking you into the Amazon ecosystem.) But at the new $179 price… that’s where the Nook shines. Coming in at $20 lower than Google’s or Amazon’s tablets, the Nook is now both inexpensive and a great quality product. Only the frequently discounted Lenovo A1 tablet may serve as a marginally better deal, largely due to the network-independent GPS on the device, a very useful feature. (As of this writing the tablet is $199, but it often dips to $169. Keep an eye out.)

Of course, we still need to see what happens should the iPad Mini be announced. A $199 iPad would likely do exceptionally well in the 7-inch tablet market.

As far as the future goes, Amazon is already poised to take on the challenge of more competition in this space with their market and online options. Barnes and Noble still lags behind in this arena, and they’ll feel the squeeze sooner rather than later as people choose functionality over intangible market bonuses and a lackluster digital marketplace. A price drop is a great first step, but the overall market strategy must be reconsidered if the Nook is to stay a viable product long-term. Ebook sales have been great for the company, but just like with their book business, competition from faster-moving foes can quickly pull them under. (If you’ve walked into a Barnes and Noble recently, though, you’ve seen how well they can adapt: walking into one these days feels like someone stuffed a Starbucks inside an Apple store inside a Toys R’ Us, and crammed the remaining space full of books. It doesn’t help, though, that an increasing number of folks are using their smart phones to find cheaper prices online for the products they find while browsing at the Barnes and Noble Bazaar.)

Edit: We recently learned that Google currently gives a $25 Google Play market credit if you buy the Google Nexus 7 and have, or add, a form of payment to their Google Wallet account. This is something to keep in mind if considering a tablet.

For the Fans

There’s a general rule of business that says that 20% of people will hate you no matter what, and 20% will love you no matter what: it’s up to you to work on that remaining 60%. Just like any successful company, Barnes and Noble has fans, and they’ve kept that 20% that loves them relatively happy. But how long can this hold, especially with an increasingly tech-savvy populace? It’s not enough to lure someone into your walled garden, you have to be sure that there’s enough within the walls to keep the people that come in. The $199 price is a great invite, and will likely net them some sales, which will invariably net them ebook and periodical sales. The question now is “what’s next?”

Conclusion

Overall, this looks like a pretty good deal, and a great first response by Barnes and Noble to recent competition. An Amazon Kindle Fire update is obviously in the works, as is a Nook update, so we’ll have to wait and see whether this will really do anything for Barnes and Noble’s bottom line. Still, at $179 for a great 8GB tablet? Yeah, I’d buy that.

Final tip: If you recently–within the last two weeks–bought a Nook at the old prices, you should probably go see if you can get a refund for the difference between the old and new prices.

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