Tablet computer price war!

Although hardly anyone knows it, Barnes and Noble has a tablet-based book reader. Amazon's Kindle was dominating the market for tablet book readers until the iPad was announced, and Barnes and Noble and Sony were running far behind Amazon. Even so, the market for book readers was relatively small because they cost several hundred dollars--less than the iPad, but not that much less. Once Apple unleashed the iPad, most potential buyers began comparing the one trick book readers (and the Kindle is only black and white) with the high resolution, color iPad with tens of thousands of applications, not just one.

Barnes and Noble is fighting back, not only against Apple but more directly with Amazon and Sony. They just lowered the price of the B&N Nook WiFi version to $149, and the 3G Nook model is only $199. The lower prices probably move the Nook out of direct competition with the iPad and make it more attractive as a second table device. Time will tell, but this looks like smart move.

Update: Apparently Amazon has dropped the price of the Kindle to $189. Some pundits are predicting the book readers will drop to around $50. Sounds about right to me. B&N and Amazon can make up the difference easily by selling books; it's the old "give away the razor and make it up on over-priced razor blades" model.

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