Barnes & Noble s (NYSE: BKS ) chorus of Anything Amazon can do, I can do
better! got a little louder this week when the book retailer announced the
latest version of its Nook portable e-reader. The new Nook isnt just an
e-reader, though. It is, unsurprisingly, an affordable tablet priced at $250.
Thats just slightly more expensive than Amazons recently announced Kindle Fire
tablet, which is expected to go on sale sometime this month at $199. Price is
the first of many things in which Barnes & Nobles device is similar but just a
little bit bigger. Just like Amazon s (NASDAQ: AMZN ) device, the Nook Tablet
has a 7-inch screen and WiFi connectivity, but Barnes & Nobles device is a bit
beefier when it comes to computing speed and memory. The Nook has a 1.2GHz
processor and 16GB of flash memory that can be expanded to 32GB, while the
Kindle Fire has a 1GHz processor and just 8GB of memory. Amazons device is
connected to that companys free cloud storage service, so the low storage is
offset. On the content side, Barnes & Noble has partnered with a number of other
companies to match Amazons numerous company-run services. The Kindle Fire has
streaming video through the $79 per year Amazon Prime service , but the Nook
supports both Netflix (NASDAQ: NFLX ) and Hulu. Amazon currently controls 12% of
the digital music market through MP3 sales and its Cloud Player service. But
Barnes & Noble teamed up with Pandora (NYSE: P ) to provide streaming Internet
radio on the Nook Tablet. Barnes & Noble seemingly covered every single base to
make itself a competitive alternative. It even signed a deal with Disney (NYSE:
DIS ) to bring Marvel Comics to the platform a backhand slap aimed at both
Amazon and Time Warner s (NYSE: TWX ) DC Comics, which partnered up on Kindle .
Amazon is banking on its brand and its reach as a content provider to get the
Kindle Fire in peoples hands. Barnes & Noble is relying on services with
established audiences Netflixs roughly 21.5 million subscribers , Pandoras 80
million users to woo the masses. Content- and technology-wise, the two truly
are on equal footing. Heres what Amazon has that Barnes & Noble doesnt, though:
Towering brand loyalty. Consumers love Amazon. According to brand research group
Brand Keys, consumers love Amazon more than any other brand including Apple
(NASDAQ: AAPL ) and Facebook. On Brand Keys Loyalty Leaders list, Amazon placed
twice in the top 10, with the Kindle brand coming in at No. 8. Barnes & Noble
itself didnt place, but the Nook shows up at No. 52. In terms of sheer brand
awareness, the Nook Tablet has a tremendous uphill battle compared to the Kindle
Fire. So Amazon has the advantage at release, but Barnes & Noble already has
made itself a comfortable bed playing second fiddle to Amazon. The companys Nook
business and its online retail operations pulled in a collective $1.42 billion
in the second quarter . Nook revenue grew 140% year-on-year, and BN.com revenue
grew 37%. With a lock on the physical retail space for books, maybe its enough
to stay steady in second. Of course, this all assumes that consumers buy into
the Kindle Fire or Nook Tablet at all. Amazon recently beefed up production of
the Kindle Fire due to greater-than-expected pre-order demand . (Amazon CEO Jeff
Bezos said the company is building millions more than wed already planned.) To
date, though, consumers have shown that while theyre willing to buy both
e-readers and tablets, theyre typically going to opt for Apples iPad when it
comes to the tablet. If Amazon takes second place in the tablet world, the
question will be whether Barnes & Noble can be profitable in third. As of this
writing, Anthony John Agnello did not own a position in any of the stocks named
here. Follow him on Twitter at
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