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Barnes & Noble Nook Color: Farewell, E-Reader; Hello, Niche Tablet

Barnes & Noble (BKS) has just rung the death knell for the e-reader with its new version of the Nook Color. Not that the device has so many problems. Quite the opposite. Running Android 2.2 with support for 125 apps, email, and Adobe (ADBE) Flash video for $249, the device has crossed the line from dedicated e-book reader to "niche tablet" status.

But that shouldn't be a surprise. It's a natural move, given the strengths of the current crop of tablets. They're perfectly positioned to develop into what tablets were meant to become: an extended family of general devices for specialty audiences.

Think of tablets for a moment as bicycles. All bicycles are roughly the same -- two wheels, chain, pedals, etc. But there are racing bikes for competitive athletes, mountain bikes for off-road terrain, and touring machines for people who want to ride from point A to point B on vacation. You can get bikes for doing stunts and bikes for beginners. There are kids bikes, retro bikes, bicycles built for two, and recumbent units that you peddle while leaning back, instead of being hunched over the handlebars.

Something similar has already begun to develop in the tablet market. Apple is currently dominant, but that won't last because one type of machine won't please everybody. It's easy to imagine a number of niche uses for a tablet:

  • reading e-books and periodicals
  • watching video, surfing the Web, and listening to music
  • emailing, video chatting, and other communications
  • creating visual media and artwork, like a graphics tablet on steroids
  • general corporate use
  • specialized business functions, such as taking sales orders or recording checklists
Many future tablets will lean in one direction or another without becoming a single-use device. The person creating artwork or editing a photo might well want to watch a video. Someone ending an email probably also wants to surf the Web.

However, specialties allow tablet makers to pursue specific submarkets that might offer higher margins, either through higher prices (a secure and ruggedized corporate device) or lower cost (a tablet that is primarily an e-book reader). The new Nook is one example of how companies will experiment with their offerings. Amazon's interest in getting third-party developers to work on Kindle apps and the rumors of co-development of a tablet with Samsung are others. Likely we'll see more by fall, when the next holiday sales season gears up.

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Image: Barnes & Noble
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