Someone else has suggested that their reading app is really what B&N should be focusing on instead of the device market, and I think they might be right. I think they found an unexplored niche (7" form factor for a tablet) with the Color; but now that other manufacturerers are moving into the niche, I'm not sure how long they can continue competing - especially as the demand in the niche seems to be more for a general-purpose tablet than an ereader with benefits.
If they were to ask me for advice, I would suggest that they keep making the Color and Tablet, but turn most of the entertainment content for them over to third party providers instead of trying to do it all themselves. They don't have the resources to imitate Amazon, and I think it's a mistake to continue trying. Partnering with well-known content providers would allow them to focus on their reading software for the devices and apps and (hopefully) make their reading experience (however it was experienced) the absolute best of the bunch. Video streaming content could continue to be handled by Netflix and Hulu+ as it currently is. Video rentals and app content could be handled by a partnership with Google Play. Music content could be handled by adding a partnership with Spotify to their current partnership with Pandora since it covers the music-on-demand aspect that Pandora doesn't.
(Yeah, I know. The above is just a dream. There are probably dozens of legal issues that will keep it from ever happening. But one can dream; right?)
