Today Barnes and Noble announced the Nook Tablet, their latest device that they intend will compete with the Amazon Kindle Fire. In my opinion the announcement of this $249 device helps sharpen the picture of the tablet market into low-end and high-end tiers.
The high-end tablet tier is dominated by the Apple iPad as no other tablet manufacturer has been able to come up with a serious competitor. Google’s Android 3.0, “Honeycomb” tablets were intended to be competitive alternatives, but Google and their hardware partners have not been able to produce compelling devices that cause one to chose it over an iPad.
Barnes and Noble shocked mobile industry observers by selling a respectable number of the Nook Color, which has been their premier 7-inch, LCD color eReader. The old-school bookstore smartly embraced a mobile enthusiast market who bought the cheaper tablet to root it and install a standard version of Android in replacement of the customized version that ships with the device. B&N was also helped by Amazon who did not have a color version of the Kindle until they announced the Fire, which is still not shipping.
Shoppers interested in buying a tablet, but who don’t want to spend $499 on one, will find the $200-$249 prices much more attractive, and both Amazon and Barnes and Noble hope consumers will be satisfied with a good enough tablet at a lower price. The Nook Tablet has more storage capacity and program memory which it thinks makes it a better media device.
B&N hopes better hardware specs plus an optimized version of Netflix pre-installed will persuade people to buy it over the Amazon Fire. Amazon counters with their entire ecosystem that includes books (like B&N), music, video, apps, and storage. Neither Amazon or Barnes and Noble are advertising their products as competitors with the iPad.
With the two ends of the market being established, one has to wonder whether there is room in the middle. Can HTC, Motorola, and Samsung develop tablets based on Ice Cream Sandwich that are more compelling than the iPad, Nook, and Kindle Fire? I am not too sure, and wouldn’t it be interesting if Apple brought to market a 7-inch tablet at a $350 price?