Massive Nook Tablet Price Drop – Will Kindle Fire Price Drop Follow?

The Kindle Fire and the Nook Tablet 8 GB have been at $199 for a long time. The Nook Tablet 16 GB has been at $249 while the Google Nexus 7 came in at $209 for the 8 GB version.

Today, B&N changed the equation drastically with massive price cuts on Nook Tablets:

  1. A $50 price cut on 16 GB Nook Tablet brings it to $199 (down from $249). So, for $199, you now get 16 GB of in-built memory (plus an SD Card). Suddenly the 16 GB Nook Tablet is a far more dangerous Kindle Fire competitor.
  2. A $20 price cut on 8 GB Nook Tablet brings it to $179 (down from $199). This was the model competing with the Kindle Fire and this forces Amazon to cut the price of the Kindle Fire to $179 or $169.
  3. Nook Color is down to $149. This should put further pressure on eInk Kindle and eInk Nook sales. It’s 2 years old now (from first release) but the Nook Color holds up very well.

Galaxy Nexus 7 forcing Nook Tablet Price Drops?

Since the Galaxy Nexus 7 came out, B&N has done the following to make Nook Tablet and Nook Color competitive:

  1. A temporary $50 gift card with the $249 Nook Tablet. This was a one or two week offer that ended around a week ago.
  2. 5 free Disney books with Nook Tablet. This offer replaced the $50 gift card (and apparently didn’t work very well, given the new price drop).
  3. Now this permanent $50 price cut.

It’s pretty obvious that the release of the Google Nexus 7 has forced B&N to lower the price of the Nook Tablet. Hooray Competition!

The big questions are – What will Amazon do? Is there a new Nook Tablet on the way?

Is there a Nook Tablet 2 on the way?

There might be an additional reason for the massive price cuts on Nook Tablets – A new Nook Tablet 2.

Rumors suggest that B&N will release Nook Tablet 2 in October. That it will have new improved screens and that it will support new types of media content, including content never before seen on Tablets.

These massive price cuts suggest B&N is clearing out stock. It certainly suggests that there might be a Nook Tablet 2 announcement in September or October and that the new Nook Tablet 2 will ship in October or November.

What will Amazon do? Is Kindle Fire 2 imminent?

The 16 GB Nook Tablet being available at $199 puts huge pressure on Kindle Fire.

Firstly, 16 GB is double the memory. Secondly, Kindle Fire memory can’t be expanded while Nook Tablet memory can be. Thirdly, both are direct competitors in the High-Value Tablet market and even people who wouldn’t have bought a Nook Tablet would want Kindle Fire prices to be adjusted so that they can feel they are getting as good a bargain.

Amazon must do one or more of the following –

  1. Drop the price of the Kindle Fire to $169 or $179. To avoid losing sales to Nook Tablet 16 GB and Nook Tablet 8 GB.
  2. Drop the price of refurbished Kindle Fires to $139 or $149. To avoid losing sales to Nook Color.
  3. Announce the Kindle Fire 2 earlier than it would have liked. To give future Tablet owners something to wait for.

I’d expect a response within a day or two.

Competition is Good for Us

By end of 2012 we might have the following High-Value Tablets in the market –

  1. Kindle Fire 2 in $199 to $249 price range. Rumored to be multiple models.
  2. Nook Tablet 2 in $199 to $249 price range. Might be multiple models.
  3. Galaxy Nexus 7 in $199 to $259 range.
  4. iPod Mini. Rumored to be at $299.
  5. Windows 8 Tablets.

It will be a lot of options and there will be brutal competition. Which is great for us customers. A few years ago the only option was a $499 to $799 iPad. Now, with $149 Nook Colors and $199 Kindle Fires and $199 Nook Tablets and $209 Nexus 7s, the technology can reach a lot more people. That in turn brings in more companies and more developers and leads to cheaper Tablets and better software.