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I do think in this tug of war between Amazon and B&N, Amazon is in a more reactive position. The Nook came out late last year. Besides having the best e-ink screen among its peers, the Nook incorporates a lot of innovative features such as touch screen navigation, color LCD, cover flow, “lend me” and in store reading/browsing. Not everyone appreciates the features but nevertheless, these features make the Nook unique and stand out in the pack. Back in June, B&N sets a new standard by reducing the WiFi+3g model to $199 and came up with a WiFi version priced at $149. One day after the announcement, Amazon responded by slashing the Kindle price to $189. One month later, Amazon came up with their own WiFi version and prices it at $10 below the Nook.
A lot of people are comparing the new Kindle with the first gen Nook which will eventually be phased out when Nook2 comes out in Septemberish (?). To stay competitive, B&N needs to match or beat Kindle’s price with the addition of what I’m hoping, more innovative killer features. Ultimately, we the free market consumer will come out as the winner of the price war as competition drives down price and we are all getting a better product.
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