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$149 Nook: The E-Reader's Demise Begins With a Race to the Bottom


Barnes & Noble has just revealed its Wi-Fi-only Nook, the first serious attempt at undercutting Amazon's Kindle e-reader business with a store and hardware combo. But it's more than that: It's a sign of the changing e-reader game.

The Nook Wi-Fi is basically the same as the original 3G-enabled Nook e-reader, with all the expensive 3G wireless tech taken out. Think of it as the Nook equivalent to the Wi-Fi-only iPad—and just as with Apple's machines, the simpler device costs less as there's less hardware inside. The clever thing B&N has done is to pin the price point of the Wi-Fi-only Nook at just $149. That's a truly magical price, and since the device comes with the huge B&N e-bookstore ecosystem behind it, and has that funky color touchscreen aboard it'll no doubt attract many a shopper who'd been previously shy of buying an e-reader through cost implications—or not wanting to buy a totally new class of device from a cheap but unheard-of provider. The limitations of only being able to download new books or use the Nook's Web powers only when in range of a wireless network won't really be an issue for many folk just looking to buy their first digital book reader, particularly at that attractive price.

But B&N have done more than this—the price of the original 3G-powered Nook has also been dropped to just $199, making it the "first under-$200 dedicated full-featured e-book reader that offers both free 3G wireless and Wi-Fi connectivity" according to B&N's press release. It's potent stuff, and it makes Amazon's Kindle 2, with no color screen and an aging-looking design look like even more of an expensive dinosaur at $259. B&N are, of course, trying to leverage cheaper hardware sales to lure potential buyers away from the glitzy but more expensive Apple iPad, and the booksellers are also really trying to push their hardware so that the users will then buy more e-books from B&N rather than any other e-retailer—like Amazon.

Yet the move is also symbolic of the e-reader's only true option in the changing mobile-device market: The beginning of the race to the bottom. It's a parallel to the netbook phenomenon, which saw a cheap, low-powered reinvention of the notebook PC hit the market and attract buyers because of its cheap price and perceived hardware benefits (like a long battery life). The strategy worked at an incredible pace at first, because the prices were so ridiculous and seemed to be getting ever-cheaper. But then the average Joe became aware of the netbook's serious limitations, and its supposedly longer battery life suddenly seemed less attractive. Now the phenomenon is over, and the netbook is merely another class of computer to buy—at a lower price, with many fewer capabilities. This is how the e-reader market is likely to go too: The device's only real benefits are the e-ink screens, which are marketed as easier on the eye than tablet PC's LCD units, and longer battery life. Starting from this simple basis, the machines can hardly get smarter as they'll start to compete with full-on tablets, and the e-ink technology just can't deliver video or even simple gaming or web-browsing very well, so they'll just have to get cheaper and cheaper in order to attract users.

Despite efforts by even the great Ray Kurzweil to beef up the way e-readers work (why is their pagination and font control so poor? why are the UIs insufferable?) the e-reader is, I think, doomed. This race to the bottom will work for a bit, and then the phenomenon will fizzle, and the e-reader will tag along as another mobile PC form factor, with a few specialist benefits which'll appeal to some users. Its place will be taken with the all-purpose tablet PC ... just as soon as folk realize there's more you can do with these, and that the LCD screen is absolutely fine for reading from.

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