Today we got to see B&N's response. They've shaved $20 to $50 off the price of all 3 of their Nook Color, Nook Tablet ereaders. The Nook Color now starts at $150, and the Nook Tablet 16GB model now costs $200, putting B&N's leading device at the same price point as the Kindle Fire, Nexus 7 and more.
And that's not all B&N did. They've also removed the Nook hardware from the B&N rewards program. According to one of my sources at a B&N store:
We will no longer be offering a member discount on NOOK products, effective 8-13. Those who renew their membership before then will still get the discount. I do not like this, its hard enough to meet our quota for memberships with the discount.
As nice as this price cut might look, it's probably not enough. The $200 Nexus 7 still has the Nook Tablet beat on everything from raw CPU power to specs, performance, and available apps. What's more, there are a bunch of other tablets (ranging from the Kindle Fire to well, everything including B&N's own refurbs) that are undercutting B&N's prices.
It's beginning to look like now might be a really good time for B&N to look for a better way to market their ereaders. The current plan of differentiating the enhanced ereaders from Android tablets clearly isn't working, so a change in tactics is in order. Perhaps B&N should consider opening up the devices and letting users see the Android tablet underneath?
They might also want to simply get out of hardware entirely; they're losing money hand over fist at this point and in the long run that is unsustainable. Heck, this might be unsustainable for B&N in the short run; retail is a business with razor thin margins.
Do you know what? At this point I'm not sure any of the mainstream Android devices are making money. Samsung released court docs this week which admitted they were seeing abysmal sales. That is scary because according to Google's Andy Rubin Samsung was showing better sales than the rest of Google's tablet partners.