Barnes & Noble said Wednesday that its new Nook HD will come in two sizes, one with a 7-inch screen (measured diagonally), starting at $199, and one with a new 9-inch diagonal screen, called the Nook HD+, starting at $269.
In addition to the new HD screen and a lighter body, Barnes & Noble is also increasing the services the Nook offers, adding a video purchase and rental service, allowing users to maintain different "profiles" and making it easier to browse titles in its book and magazine stores.
New York-based Barnes & Noble, the largest traditional U.S. bookseller, has invested heavily in its Nook e-reader and e-books. In its most recent fiscal quarter, sales of digital content surged 46 percent, but revenue from devices dropped partly due to lower prices. Nook prices in the May-July period were about 23 percent lower than a year ago.
The company is seeking to offset tough competition from online retailers such as Amazon.com, as consumers increasingly move away from traditional books and DVDs to electronic books and streaming video.
The Nook HD is an upgrade to the hardware and services offered by its previous tablets, the Nook Tablet and Nook Color, which Barnes & Noble is phasing out. The company will continue to sell its smaller black-and-white e-reader, called the Nook Simple Touch, for $99, and a backlit Nook Simple Touch for $139. The Nook HD runs on Google’s Android 4.0 system and includes Barnes & Noble’s own app store and browser.
Tablets are —once again— expected to be hot items this holiday. The new Nooks come on the heels of Amazon.com’s announcement earlier this month that it will offer four new varieties of its Kindle, including a high definition version of its Kindle Fire tablet with an 8.9-inch diagonal screen, which starts at $299. That compares with Apple Inc.’s iPad with a 9.7-inch diagonal screen and $499 starting price.
Apple’s iPad is the most popular tablet, and that is not expected to change. Seven out of every 10 tablets sold in the second quarter were iPads, according to IHS iSuppli. Meanwhile Amazon.com has a 4.2 percent share of the tablet market, while Barnes & Noble has a 1.9 percent share, according to iSuppli.
Even so, the category is growing rapidly. An estimated 112.5 million Americans, one-third of U.S. adults, are expected to have tablets by 2016, according to Forrester Research.
And tablet makers are jockeying to gain share on Apple. On specs alone, the new Nook presents a tough choice for consumers seeking a cheap option to the iPad this holiday, analysts say. The 7-inch Nook HD is slightly lighter and narrower, with a sharper display than the similarly priced 7-inch Kindle Fire.
"If the decision the consumer is making is whether to buy based on hardware, these new Nooks will beat out Amazon," said Forrester analyst James McQuivey. "But that’s not the decision every consumer is going to make — hardware is only as good as the services the hardware enables."
So far, Amazon offers more services, McQuivey said, with a bigger app store, and more extensive video library, not to mention Amazon’s vast product offerings and its Amazon Prime free-shipping service.
In an attempt to measure up, Barnes & Noble is launching a video service this fall that lets users buy and watch movies and TV shows on their mobile devices and televisions. The offerings will come from major studios including HBO, Sony Pictures, Viacom and Warner Brothers. Scrapbook and catalog browsing features have also been added.
One wild card working in Barnes & Noble’s favor this holiday: Wal-Mart Stores Inc. and Target, increasingly threatened by Amazon’s online retail operations, won’t carry the Kindle. The retailers will sell Barnes & Noble’s Nooks, as well as other tablets like the iPad.
"This is going to be a lot of fun to watch over the next year," McQuivey said.
The new Nooks are available for pre-order online and in stores beginning on Wednesday and will begin shipping in late October and begin arriving in stores in early November.