2 New Nooks to Compete for Holiday Tablet Sales

Andrew Tonner
Andrew Tonner
Sep 26, 2012 at 12:00AM

Barnes & Noble (NYSE:BKS) will debut two new, HD versions of the Nook tablet in time for the holiday season. The 7" version is priced at $199, and a 9" version will also be available for $269. The goal is to compete on price with main competitor Amazon (NASDAQ:AMZN), namely the Kindle Fire suite of products. Last year, Amazon undercut Barnes & Noble on tablet pricing, which significantly affected Nook sales during the holiday quarter.

Will low-priced, well-timed Nooks be enough to keep Barnes & Noble in line with competition? While the company has done a commendable job transitioning away from its bricks-and-mortar origins, the answer is still, most likely, no. One problem is that the Nook has no built-in ecosystem, something that consumers demand from their tablets. The new versions will incorporate a digital video store, which is a step in the right direction, but still unable to compare to the robust ecosystems of Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) tablets. Barnes & Noble simply lacks the scale to attract developer talent on par with the competition.

Watch the video below for Fool.com analyst Andrew Tonner's full take on the subject, and find out why he's calling the stock a definite "Hold."


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