Barnes and Noble's Nook vs. Apple's iPad

Barnes & Noble's Nook will compete against Amazon's Kindle Fire for the e-reader market. But it will also be weighed against Apple's iPad for holiday-shopping dollars.

NEW YORK - During Barnes & Noble's Nov. 7 unveiling of its new Nook Tablet, CEO William Lynch stood before dozens of assembled media and made a somewhat startling claim: The Nook Color, the bookseller's previous full-color device, is the second-highest-selling tablet after Apple's iPad.

Samsung and some third-party analysts would probably beg to differ on that point. For the fourth quarter of 2010, research firm IDC pegged the Korean manufacturer as owning 17 percent of the market, trailing the iPad's 73 percent-and shoved the Nook into a separate "e-reader" category.

But Barnes & Noble clearly wants consumers to see the Nook Tablet as less an e-reader, and more a touch-screen device in the mode of the iPad or Amazon's upcoming Kindle Fire. The 7-inch device, due sometime around Nov. 17 at a price point of $249, includes a 1GHz dual-core processor, 16GB of storage and 1GB of RAM. Barnes & Noble claims the tablet will offer nine hours' worth of video playback on a single battery charge, or 11.5 hours of e-reading.

While those specs place the Nook Tablet in line with some other tablets on the market, the device is also different in some key ways. During a question-and-answer session following the Nov. 7 event here, Barnes & Noble executives suggested that their tablet wouldn't have full access to the applications in the Android Marketplace. As a strategy, this differs substantially from that of other Android tablets on store shelves, which have full access to Marketplace. It could also place the Nook Tablet at something of a disadvantage against the iPad, which boasts an App Store with hundreds of thousands of offerings.

Unlike Amazon or Apple, Barnes & Noble won't offer any streaming services of its own; instead, it will rely on applications from Netflix, Pandora and other partners to port content onto the Nook Tablet. From a strategic perspective, this spares the bookseller from the complexities of arranging content deals with media companies and building the back-end infrastructure needed to deliver content to users, but it also deprives the company of revenue from movies and television shows. It also makes the Nook Tablet less "sticky" in terms of binding users to its ecosystem.

During the event, Barnes & Noble executives made head-on comparisons between their device and the Kindle Fire, claiming the Nook Tablet's storage and IPS-laminated screen make it superior to Amazon's offering. The latter will debut next week at a $199 price tag, undercutting the Nook Tablet's price.

But Barnes & Noble might be betting that holiday shoppers, confronted with a plethora of more expensive tablet options, will opt for the Nook Tablet with similar features at a much lower price point. In that context, the bookseller's placing its device in the same league as tablets like the iPad makes more sense. At the same time, though, that rhetoric opens the company to the risk that consumers will weigh all possible devices, and find theirs wanting.

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