New $199 Nook Tablet to compete with Fire

Company announces new version of its tablet on the same day it posts a profit decline. The new Nook Tablet, with half the memory, shaves $50 off the original's price. Also: Nook Color e-reader is shedding $30.

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Roger Cheng

Feb. 21, 2012 6:07 a.m. PT

2 min read

Barnes & Noble has Amazon's Kindle Fire directly in its sights. Its latest ammunition: a $199 Nook Tablet with 8GB of memory.

The new version of the Nook Tablet--$50 cheaper and with half the memory of the original--now matches the Kindle Fire in price and memory specs. The book retailer hopes the lower price will make it more of a rival to Amazon's tablet, which has established itself as the No. 2 player behind Apple's iPad. Amazon has attracted customers through a lower-end price and a decent selection in its online store.

Barnes & Noble also announced a $30 price drop for the Nook Color e-reader, which will now cost $169.

The company badly needs a success in the tablet arena to offset maturing sales in its traditional book business. The company, which released quarterly earnings today, saw sales rise 5 percent year over year to $2.44 billion. However, profit fell 14 percent from a year ago to $52 million, or 71 cents a share. The earnings report, which covered the three-month period ending January 28, said that per-share earnings would have been 99 cents excluding one-time items.

Analysts, on average, had forecast earnings of 92 cents a share on revenue of $2.53 billion.

The company did see a surge in online sales, driven by purchases of its Nook line of e-readers and tablets.

The company expects full-year revenue of $7 billion to $7.2 billion. Its earnings before interest, taxes, depreciation, and amortization are expected to be $150 million to $180 million, and its per-share loss is expected to be $1.10 to $1.40. The Nook business is expected to generate $1.5 billion in comparable sales this fiscal year, the company said.

The Nook Tablet promises to figure prominently in Barnes & Noble's business. While the Kindle Fire has captured much of the buzz that isn't already surrounding the iPad, the 16GB Nook Tablet at $249 has seen fewer takers. Still, Barnes & Noble could become a stronger competitor with its new 8GB tablet and the large distribution capabilities of its stores.

Like the original Nook Tablet, the new version has a 1GHz dual-core processor and a slot for up to a 32GB microSD card. Both also boast 11.5 hours of reading time and 9 hours of video playback.

The new version of the Nook Tablet and cheaper Nook Color are available at Barnes & Noble's Web site, starting today. The Nook Tablet will also be available at retailers such as Best Buy and Wal-Mart in the coming weeks.

Correction at 7:10 a.m. PT: The story incorrectly stated the amount of memory in the new Nook Tablet, based on the company's press release. The new Nook Tablet has 8GB of memory.