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B&N should be okay when it comes to competing with the K4Touch and the Fire, just on the basis of their sd card support. NC2 may need to come in at $229 but even staying at $249 won't kill them. Not short term.
The problem for B&N is longer term: installed base.
Amazon started the year with a big lead in install base and a comfortable, but hardly overwhelming, market share edge. B&N could hope to erode US market share and keep Kindle from running away. That is no longer an option. Not long term.
Fire aside, Amazon now sells *five* Kindle models in three fork factors; touch, keyboard, and bare. That gives them three wifi models priced lower than Nook. Nook has no answer to two. And while the keyboard Kindle is a known quantity, the big threat to B&N is the bare Kindle 4.
Most reports seem to be deprecating the $79 KSO as a loss-leader, which may be a mistake. Even at the Adfree $109 it is a pearl-based, highly portable reader with wifi and a browser. Slightly narower than a PB360, slightly wider than a Sony350, but with a 6in screen. $20-40 cheaper than anything else not named Kindle.
Not everybody has touchscreen on the brain so this K4 is going to *sell*.
When the final tally comes in, all the work B&N put in to narrowing the market share gap likely will be for naught. And since both Amazon and B&N are really fighting for ebook sales, which are a function of the installed base not the rate of new reader sales, B&N's long term plan of replacing declining pbook revenue with ebook revenue just got a lot harder.
Mind you, compared to the *other* epub vendors, B&N is in great shape.
Its easy to forsee another exodus, starting with iRiver.
By this time next year, I can easily see Kindle+Nook+Kobo adding up to 99% market share. And with dedicated ebook readers already in 15% of US households, and maybe 10-15% more ready to jump in, according to recent reports, this particular game doesn't have long to run.
Time to find a new game (k-12, academia?) and soon.
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