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NEW YORK (

TheStreet

) --

Barnes & Noble's

(BKS)

new Nook

, expected to launch Monday, will up the ante in its battle with

Amazon

(AMZN)

, but could also put a dent in the struggling bookseller's finances.

The New Nook will go up against Amazon's recently launched

Kindle Fire

, a tablet/e-reader combo which has been touted as a cheaper alternative to

Apple's

(AAPL)

phenomenally successful iPad.

Launched in September, Amazon priced the Kindle Fire at $199, undercutting Barnes & Noble's Nook Color by $50.

Amazon, however, is selling the Kindle Fire at a loss in an attempt to drive sales of other products from the retail giant, noted Carl Howe, an analyst at Yankee Group. "Obviously, Amazon has more leverage

than Barnes & Noble -- they have more things to sell," he told

TheStreet

. "

But both companies struggle with the pricing issue."

Some

rumors

have tagged Barnes & Noble's new Nook at $199, a figure which would have a significant impact on a firm which has been struggling with declining in-store sales.

Amazon also has $6.33 billion of cash and marketable securities at its disposal, making it easier to swallow Kindle Fire losses.

Yankee Group's Howe, though, thinks that Barnes & Noble will sell its new Nook at a higher price, likely in the region of $250.

"I think that they are going to take a break-even approach," he said. "There's only upside -- they don't lose money on the device and they are getting more sales through their stores because they have this tethered device

to the stores."

Best Buy

(BBY)

has already cut the price of the existing Nook Color to $199, further fueling speculation that the new Nook will have a higher price tag.

Barnes & Noble has been enjoying strong Nook sales, despite

posting losses

.

--Written by James Rogers in New York.

>To follow the writer on Twitter, go to

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