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New Nook Color could beat Kindle Fire's sub-$200 price

Apple could eventually respond with a lower iPad price

November 2, 2011 06:56 AM ET

Computerworld - Barnes & Noble has invited the news media to a New York event on Monday, sparking speculation that the bookseller will announce a lower-cost Nook Color tablet computer that matches or beats the $199 price of the upcoming Amazon Kindle Fire.

Three analysts agreed that Barnes & Noble won't want to be beaten by Amazon.com on price, since it already sells a 7-in. Nook Color for $249 that was first announced Nov. 19, 2010, and was updated to Android 2.2 in April. The 7-in. Kindle Fire tablet, announced Sept. 28, will be available Nov. 15, eight days after the Barnes & Noble event.

"The issue [facing Barnes & Noble] is price and availability of content, which is the key issue for all tablets going forward," said Jack Gold, an analyst at J. Gold Associates.

In addition to potentially lowering its Nook Color price, Barnes & Noble could announce a sub-$100 black and white e-reader to compete with low-cost Kindle e-readers from Amazon, analysts said.

The most far-reaching idea has Barnes & Noble announcing a new model of the Nook Color that runs a quad-core processor, up from the single-core and dual-core processor from various tablet makers.

Rob Enderle, an analyst at Enderle Group, said Nvidia's quad-core chip, code-named Kal-El, could be incorporated into the next Nook Color, giving it unmatched speed for browsing and playing Flash content. "If it's Kal-El, it could be really interesting," Enderle said.

However, Bob O'Donnell, an analyst at research firm IDC, said it isn't clear that any tablet running less than Android version 4.0, also known as Ice Cream Sandwich, can take advantage of the fast speed of a quad-core chip. "Any pre-ICS tablet would make a multicore chip useless," he said. Samsung is unlikely to announce another tablet this fall, after recently announcing the Android-based Galaxy Tab 7.7 in September, the analysts said.

However, they disagreed on the impact the Barnes & Noble announcement and the Kindle Fire will have on Apple, which has the runaway tablet leaders, with the iPad and the iPad 2 commanding more than 70% of the tablet market. The lowest-priced iPad 2, with its 9.7-in. screen, is priced at $499, but competitive pressures could change that price, analysts said.

O'Donnell said he doesn't expect an iPad 3 until 2012. Enderle said Apple will probably closely monitor how the Kindle Fire performs, and there's a slim chance that CEO Tim Cook could announce by year's end a "downscale iPad" to compete with the lower prices of the Nook Color and Kindle Fire.

"We'll see what happens now that Cook is in charge, since Cook wanted to do a lot of things that Jobs didn't agree with," Enderle said. "Cook could pull a surprise with iPad if he sees Fire doing too much [in sales]."

O'Donnell said Apple's strategy will probably be to follow what the company has done with successive generations of its iPhone -- substantially lowering the price for the previous generation devices. "Apple will probably announce an iPad 3 next year, while lowering the iPad 2 to $399 or even $349, from $499," O'Donnell said.

The key for all the platforms could well come down to the number of available of apps, an area where Apple clearly reigns. But O'Donnell said a sub-$200 price for a new Barnes & Noble tablet that emphasizes fast browsing could make up for having fewer available apps. "Barnes & Noble still will have some apps," he said.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at Twitter @matthamblen or subscribe to Hamblen RSSMatt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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