New Nook to Challenge Kindle Fire

After Amazon (NASDAQ:AMZN) announced their latest set of tablets, the larger of which obviously aimed squarely at Apple’s (NASDAQ:AAPL) dominant iPad, Microsoft (NASDAQ:MSFT) and Barnes & Noble (NYSE:BKS) announced that the latest version of the Nook tablet would be released before the end of September.

The speculation at this point is that the new Nook would be running Windows RT, filling the void in the Windows tablet panoply of devices by providing a 7″ tablet for their ecosystem that also fits in with Microsoft’s desire to position Windows 8 devices as premium products with superior user experiences.

This rumor follows the format of devices being unveiled throughout the summer by Microsoft and its partners/investments, who took a $605 million stake in B&N to get access to the Nook and add it to their stable of products to sell in their ecosystem.  With the rapid evolution of the Kindle Fire, the success of the Nexus 7 from Google and the upcoming iPad mini from Apple, the Nook looked to be the odd man out in the big tablet war.

But, flying under that radar was Microsoft’s investment in them and it really doesn’t take a genius to see how the Windows 8 strategy is shaping up.  None of Microsoft’s OEMs have announced a 7″ tablet, not Acer or Asus, Dell (NASDAQ:DELL) or HP.  There had to be a reason for this.  Even a blind man could see the potential for a 7″ Win 8 tablet so why wasn’t anyone, even Nokia (NYSE:NOK), looking to build one?

Simple.  Microsoft bought Nook for the purpose of positioning the Nook as the Win8 7″ tablet.  It really makes perfect sense. In a few week’s time we’ll see if the speculation is correct.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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