Time To Focus on Cheap Color Tablets, Not E-Readers

Barnes & Noble (BKS) is rumored to release a color version of its Nook e-reader later today. According to the speculation, it will be a $250 Google (GOOG) Android-powered tablet, possibly to support a children's ebook line. Can you say drool-proof?

However, I don't think that this will be the tablet tipping point as John Biggs of TechCrunch supposes... unless B&N stops promoting the Nook as an e-reader and really lets it be a tablet.

The problem with e-readers is that, relative to an iPad, they've been relatively expensive for what they deliver. At the moment, their ability to surf the web and read email rates as an "additional" feature. Additional. The same with apps. Even though technically the current Nook could be considered a tablet, Barnes & Noble has focused on it as an e-book reader, with Amazon (AMZN) issuing one Kindle-related press release after another over the last couple of days, presumably to distract people from the announcement.

But an e-reader positioning is too limiting. Some experts expect a $50 black and white e-reader/tablet in a major retail distribution by the holidays. That sets a new low end that could get a lot of attention. Create a reasonably functional color tablet under $250 -â€" a book retailer could call it an e-book edition tablet if it had to -- and you potentially grab many people who have stayed away from an iPad. Clearly many of current tablet makers seem intent on pricing higher than Apple. That leaves the pricing bottom end wide open and ready to be addressed.

Price alone isn't the only possible selling feature. Even though Apple has been smart about getting publishers to build apps, some like Conde Nast plan to stick with Flash from Adobe (ADBE) as their preferred publishing tools. A properly designed and priced tablet could have a lot of draw.

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Image: Barnes & Noble

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