Barnes & Noble introduced its Nook Tablet this week, putting it in direct competition with the Kindle Fire tablet from Amazon. While it is clear that both companies want to encourage digital content sales via the devices, Barnes & Noble?s move also raises the possibility that the company might expand beyond a simple content offering.

The new Nook tablet from Barnes & Noble offers movies, TV shows, music, Web browsing, email and apps in addition to the digital books and publications found on the company?s ereaders and Nook Color tablet. If the new tablet is successful, Barnes & Noble might look for ways to extend its capabilities.

?Barnes & Noble has the ability to take advantage of mobile applications that are available for an Android device that would allow them to tap into more than media,? said Jeff Orr, group research director for mobile devices at ABI Research, Oyster Bay, NY. ?They could extend to games, utility gadgets such as weather and sports ? those are all possible on the platform.

?Does that go into a general shopping experience ? probably not,? he said. ?The retailer is probably going to stay closer to home in terms of an arts and entertainment focus.?

Barnes & Noble did not respond to a request for comment by the press deadline.

Digital media consumption grows
The Nook Tablet was designed for customers who want to read and be entertained with a variety of apps and media. The Nook Color tablet, in comparison, is optimized for reading while also enabling Web browsing, email and the use of mobile applications.

With price tag of $249, the Nook Tablet weighs in at 14.1 ounces and features a 1GHz dual-core processor as well as 1GB of RAM so users can stream HD videos smoothly. The battery allows for 11.5 hours of reading time or nine hours of video viewing.

Digital media consumption is quickly growing thanks to devices such as tablets. For booksellers such as Barnes & Noble, the printed book market is increasingly challenging as consumers migrate to digital media consumption.

One of the challenges Barnes & Noble faces in the tablet space is that it does not have many content relationships beyond book publishers.

To address this situation, Barnes & Noble has announced agreements with Netflix, Hulu Plus, Pandora and others to provide digital media content on the Nook Tablet.

The retailer also said it will continue to build out its digital content offerings and plans to introduce Flixster, Warner Bros. and other leading studios as content partners in the near future.

?If Barnes & Noble has aspirations to be more of a broader media distributor than it makes sense for it to grow beyond the ereader market,? Mr. Orr said.

?These tablets are looking to drive a broader consumption of media, including audio and video,? he said.

?This appears to be one of the aspirations that Barnes & Noble has, to grow beyond being a bookseller.?

However, much of the content Barnes & Noble is making available via the tablet is also available from desktop computers, game consoles and other devices

?Having those relationships are good but it doesn?t necessarily differentiate the Nook Tablet from the other ways that one could consume this same content,? Mr. Orr said.

It may be that there is a different demographic group attracted to the Nook Tablet versus the Kindle Fire, with the Barnes & Noble customer skewed more heavily toward baby boomers, per Mr. Orr.

Barnes & Noble does not need to make a profit on its new tablet because most of the revenue will come from content sales. Amazon also has a strategy in place to drive content sales via the Kindle Fire.

?These are about pushing content out to users in a way that has been proven that they buy on,? said Michael Morgan, an analyst with ABI Research

?Barnes & Noble is moving up what they can push to folks in terms of content,? he said.

The price is right
The $200 to $250 price range that both the Nook Tablet and the Kindle Fire fall into is generally considered to be the starting point for trying to reach a mass audience.

The Nook Color has been credited with setting the standard for lower priced tablets, as it was priced $249 when it was first introduced. Barnes & Noble said it is lowering the price for the Nook Color when it launched the new Nook Tablet.

The $200 to $250 price range also takes these devices out of direct competition with the iPad, which has a starting price of $499. 

?The Nook Tablet is most directly competing against the Kindle Fire, specifically because of price point,? Mr. Morgan said. 
?It is a known fact that when you hit that price point, you have the chance to go mass market,? he said.

?The price is low enough that this is not competing against the iPad.?

The Nook tablet is available for pre-order at www.nook.com and at Barnes & Noble stores.

The tablet will be in stores and in homes on or about Nov. 17. It will also be found in new Nook Digital Shops inside Barnes & Noble stores.

The price on the Nook Simple Touch has been lowered to $99.

One of the big differences between Kindle Fire and the Nook Tablet is in how they address memory and storage.

?The big difference between them is that the Nook Tablet is going with more memory and expandable memory while Kindle is going with cloud memory,? Mr. Morgan said.

?When it comes to using the cloud approach, this is going to be easier and gives Amazon a slight edge,? he said.

?With Amazon?s custom browser, the Fire is much more tailored toward leveraging the cloud and developing a faster browsing experience.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York