I don't think that even the mighty Apple (Nasdaq: AAPL) saw this coming.
Barnes & Noble (NYSE: BKS) introduced its NOOKcolor yesterday. The device is a break from the color-less e-readers on the market, where keyboards take up a good chunk of the viewing space.
NOOKcolor is really an e-reader trapped in the body of a tablet. B&N's new gadget is a 7-inch touchscreen tablet that just happens to devour e-books. More than just digital books and magazines, it helps children's picture books come to life with rich graphics and interactive features. Owners can peck out Sudoku and crossword puzzles. NOOKcolor also features Wi-Fi connectivity, so streaming Pandora or hitting up websites is as simple as firing up the built-in browser.
The biggest reason for Apple to worry is that NOOKcolor is priced at $249, half of the ransom commanded by its entry-level iPad.
Steve Jobs ripped into the trend of 7-inch tablets last week, but that was a knock primarily intended for Research In Motion's (Nasdaq: RIMM) PlayBook and Hewlett-Packard's (NYSE: HPQ) Zeen, and a horde of Android tablets that will pale in size to the iPad's 9.7-inch screen. Those devices are unlikely to hit the market at $249, unless they're tethered to wireless contracts that will bleed owners dry over the next two years.
B&N has a real shot here, but it needs to overcome its debt challenges. NOOKcolor also has to come out on time and deliver as promised.
The bookstore giant expects to begin shipping the NOOKcolor come Nov. 19, but we've seen this before. Delays plagued holiday shoppers during last year's debut of the original Nook. Will history repeat itself?
There's also the possibility of buyer confusion. A year ago, there was only one Nook. Now there will be the $149 Wi-Fi Nook, the $199 Wi-Fi Nook with 3G access, and the $249 NOOKcolor.
Will the high-end rollout scare away potential buyers of the original Nook models, fearing that they are obsolete? Amazon.com (Nasdaq: AMZN) and Borders (NYSE: BGP) have e-readers that are competitively priced against the original Nook models. If B&N sends a mixed marketing message, it may wind up losing battles at both ends of the market.
Still, one has to applaud B&N for raising the bar on e-readers -- or lowering the limbo stick on tablet pricing -- with the NOOKcolor.
The holidays just got a little more interesting.
Does the NOOKcolor stand a chance? Share your thoughts in the comment box below.
