7-inch Tablet Wars: How Low Can Prices Go?

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The low-end of the tablet market keeps getting more interesting, as device makers scramble to lure people in with cheap hardware.

The latest move comes from Barnes & Noble, which over the weekend slashed prices across its Nook tablet line:

Compared to the Nook Color, the Nook Tablet has a snappier dual-core processor and better battery life, but both Nooks have microSD slots for expandable storage. All of Barnes & Noble’s tablets run a highly-modified version of Android with an emphasis on e-book and magazine reading. Barnes & Noble also runs its own app store, though it’s not as extensive as Google Play, and there aren’t nearly as many free apps available.

Barnes & Noble’s Nook price cuts aren’t likely to be the year’s last big move in the cheap tablet market. As Gizmodo pointed out last week, Amazon briefly sold its oversized Kindle DX e-reader for $110 off the sticker price, possibly to clear inventory ahead of a rumored larger Kindle tablet. Some of Amazon’s other Kindle e-readers are in short supply as well, so an overhaul for the entire Kindle line could be imminent. When that happens, the price of the existing Kindle Fire could very well drop below $199.

What to do, then? If you simply want the best 7-inch tablet right now, scrounge up the extra dough and get a Nexus 7. It’s smoother than any of the tablets from Barnes & Noble and Amazon, it has more apps and it’s faster at switching between multiple programs. Alternatively, you can wait to see if Apple launches a smaller iPad, as rumored, but pricing and release timing are still anyone’s guess.

If you just want a cheap tablet for reading and the occasional web page or app, I’d also suggest waiting a little longer. The Nook price cuts aren’t going away, and if the original Kindle Fire falls to around $150, it’d be a better buy than the Nook Color at the same price. We may even see another price war like the famous e-reader showdown of 2010.

Prices are plummeting because tablet makers want you hooked on their apps, e-books and other content, and they’re willing to sacrifice hardware profits to claim your future business. With new competition from Google — and possibly more pressure from Apple — Barnes & Noble and Amazon have nowhere to go but down.

MORE: 30 Days with Google’s Nexus 7 Tablet