At some point during Amazon.com's
It no longer became a matter of Amazon's ability to eat into Apple's
How long can the bookstore chain keep selling the Nook Color at $249? Now that Amazon is offering non-touch Kindles for $79 and touchscreen Kindles for as little as $99, how much cheaper will the entry-level $139 Nook get?
Barnes & Noble's immediate reaction was to fire off a promotional email to some customers yesterday afternoon, offering a $25 price break. Meeting the Kindle Fire halfway isn't going to be enough, though.
The Nook Color and Kindle Fire are similar in many ways. In the areas where they differ -- weight, thickness, and processor speed -- the advantages go to Amazon. In other words, even a $50 price cut may not be enough.
"Best value in the tablet world," reads an MSNBC.com quote used on the Nook Color's landing page. Well, that may have been true until yesterday morning.
The Nook Color simply can't match the Kindle Fire. Customers aren't dumb. They know that the panhandling that resulted in a cash infusion by Liberty Capital
Amazon has also been quietly building a secret weapon. Amazon has been building up its digital arsenal of movies and television shows that it streams for free to Amazon Prime members. Earlier this week, a deal pushed that up to 11,000 titles. The Kindle Fire comes with a 30-day free trial to Prime, and I imagine many of early adopters are already members.
The Nook and Nook Color have some advantages over the Kindle, but they aren't significant differentiators as the Kindle evolves as well. The Nook and Nook Color will have to drop to $99 and $199, respectively -- and ideally $10 or $20 lower than that -- if Barnes & Noble wants to remain competitive.
Can it, though? Margins are already being pressured and the business of selling physical books is a cash cow that will eventually have to be put to pasture. It's getting hard to fathom a scenario here where Barnes & Noble makes it out a winner.
Your move, B&N.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Liberty Capital. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.