At $249, Barnes & Noble Tablet Is $50 Higher Than Nook Color, Kindle Fire

CEO William Lynch noted at the company’s press conference at its Union Square store in New York Monday that Barnes & Noble’s entry-level reader reaches a sub-$100 price point with “no annoying ads,” in a swipe at Amazon’s starter readers that are priced $99 with advertising support and $139 without. For a product that will largely be a gift purchase this holiday season, customers shouldn’t have to choose whether to spend an additional $40 to eliminate advertising, Lynch said.

With the Tablet, Lynch launched a direct attack on Kindle Fire, despite the latter’s retail price that’s $50 less than the Barnes & Noble Tablet. Primary differentiating features, Lynch said, are display, memory, weight, battery life and in-person customer support at Barnes & Noble’s 700 retail stores, Lynch said. The company began taking pre-orders Monday, and the Nook Tablet is due in stores at the end of next week, he said. There’s no trade-up option for Nook customers who bought previous Nook models, Lynch told us, but he said Barnes & Noble club members get a $25 discount on Nook Color and Tablet and $10 on other Nook devices.

The $50 upcharge for the Tablet over other reading tablets could be a steep reach for consumers, said Ross Rubin, principal analyst at NPD Group. “If Barnes & Noble were so confident in the appeal of a product with a $50 premium, it wouldn’t have devoted so much attention to critiquing the Kindle Fire,” he told us. The Nook Color, with its $50 discount, could also eat into the Nook Tablet’s numbers, he said. “The Nook Color will be an important product for going head to head with the Amazon tablet at $199, and it will surely steal some sales away from the Nook Tablet,” he said.

Regarding competing against the Kindle Fire, Lynch said: “We'll see what it has; we know what they've said.” Overall, Barnes & Noble wants to be “the most innovative company in digital reading,” he said, citing PDF compatibility, interactive kids’ books, comics and the company’s large selection of digital magazines. “Kindle Fire is a vending machine for Amazon services,” he said. “They're trying to lock consumers into their ecosystem, and we've chosen to be much more open” with partnerships with Pandora, Netflix and Hulu Plus, he said. “We're going to make those services operate better than anywhere else, and we'll let the consumers choose,” he said. Barnes & Noble plans to have “thousands” of apps for the Tablet available by year-end, he said. The Nook Tablet will come pre-loaded with apps from MOG, Break Media, Ustream, Smithsonian Channel, TV.com, Rhapsody, TuneIn, Grooveshark, Rovio, EA Mobile, Conde Nast, Concrete Software, Loudcrow, Oceanhouse Media, Drawing Pad and iStorytime, the company said.

For now, Nook Color and Tablet users will be restricted to acquiring apps through BN.com, although both devices are Android-based. Over time, Barnes & Noble could “open up some of these devices” to Android Marketplace, Lynch suggested. “We've had discussions, but right now we can’t field the number of calls we're getting from developers trying to get into our own app store,” he said. The top developers grossed $100,000 in the first 30 days on the Barnes & Noble app. “We recognize there’s this huge world out there in the Android Marketplace, so we're looking at it,” he said.

Amazon made headlines last week with a lending program that would allow users to “rent” a digital book from its Lending Library, a collection of “thousands” of e-books, including 100 best sellers. Users can borrow one book at a time with no due dates, the company said. We asked Michelle Warval, vice president of user experience and design, if Barnes & Noble was planning a similar strategy in response to the Amazon program. She noted the Barnes & Noble Lend Me feature, which enables BN.com customers to swap e-books, but that requires that a Nook customer has friends with Nooks and similar reading tastes. She said the company has no plans to offer a lending library at this time but is looking at the possibility.

Barnes & Noble’s Tablet uses the same VividView touchscreen found on the Nook Color, which Lynch said supported 1080p content. That claim was met with criticism by journalists, who noted that the screen resolution of the IPS (In-Plane Switching) LG display is 1024 x 600 and therefore unable to produce a true 1080p picture. In response to a question about the discrepancy, Lynch said, “We're streaming Netflix at 720p, which is HD. That’s what we mean when we say we support HD entertainment.” He said the device doesn’t have a video output for display on an HDTV. The Kindle Fire also is said to include an IPS 1024 x 600 display. Lynch differentiated the two by saying the Tablet’s display includes “a full IPS lamination and no air gap display architecture,” which is said to offer superior color density resolution, a wider viewing angle for shared reading or movie viewing, and reduced reflection and glare.

Memory on the Barnes & Noble Tablet is 16 gigabytes internal, and can be expanded by 32 gigabytes with a MicroSD card. The card fits into a slot on the back of the tablet that’s hidden by a rubber latch. While Lynch touted the “massive” storage capability of the device, compared with 8 gigabytes of memory on Amazon’s Kindle Fire, users won’t be able to store purchased video on the device at launch. The Tablet comes loaded with Netflix and Hulu Plus apps, but those services are only available on a streaming basis. Any stored video content will have to be content that users own the rights to, Warval told us. The company is working on additional content deals, executives said.

Battery life of the Nook Tablet was given as 9 hours of video or 11.5 hours of reading, with a battery “half the size of the iPad’s battery,” Lynch said. Users would have to be in range of a Wi-Fi router or hotspot to be able to view videos from Netflix or Hulu Plus, however. Lynch mentioned airplane travelers’ frustrations of running out of battery life on a device while “trying to sneak in one last movie,” although those travelers would have to be on an aircraft equipped with a Wi-Fi connection for the feature to be useful. That scenario is “why we've made innovating on battery life such a priority,” he said.

Additional features of the Tablet include a 1-GHz dual-core processor with one gigabyte of built-in RAM. The device weighs under a pound and “slips easily into a pocket or purse,” Lynch said. The Tablet has a Read & Record feature that enables parents or grandparents, for example, to record their voices reading a book using the built-in microphone, which a child can listen to later while looking at the book’s pictures.

Barnes & Noble is supporting the Nook Tablet and other re-positioned Nook devices with the “largest marketing campaign” in the company’s history, Lynch said. He showed one video, a song and dance commercial in the “Glee” theme featuring actress Jane Lynch as a Barnes & Noble spokeswoman pushing her recent book, “Happy Accidents.” Authors James Patterson and Danielle Steele will also appear in Barnes & Noble ads that will run on TV, in print and online, Lynch said.

Barnes & Noble beefed up its retail roster last week in time for the new product launch, announcing retail deals with Fry’s Electronics, Tiger Direct and CompUSA. Fry’s, with 34 stores in nine states, will begin selling the devices in November, Barnes & Noble said. Tiger Direct and CompUSA will start selling the devices in December, the company said. According to press releases, the retail agreements cover Nook Color and the Simple Touch. Questions to Barnes & Noble regarding whether those retailers will also carry the Tablet weren’t answered by our deadline.