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"Barnes &amp; Noble has has asked investors for a while to be patient with its ebook initiatives, but Amazon's Fire has turned up the heat.\nB&amp;N began testing its investors' resolve in February, when the company suspended its dividend to plow more money into Nook. It's a move that would have gone over better with investors if it had provided them with some more information about Nook sales.\nThings improved earlier this month when B&amp;N reported its fiscal Q1 sales. At that point, digital looked like a savior for the company, albeit one that wouldn't turn a profit for a while. Brick-and-mortar sales fell 3% that quarter, but sales on bn.com, which include Nook, rose 37%. At the time, however, investors were wondering what Amazon was going to announce and how that would affect B&amp;N. \nNow we know. Amazon's Fire tablet is $50 cheaper than Nook Color, and the entry-level Kindle is now $60 less. Not surprisingly, investors are freaking out and analysts expect the company to cut its prices right away. \nThat move, though necessary, is likely to be a tough one for investors to digest. Despite Nook's strong sales, it's a drag on earnings: For fiscal 2011 (which ended April 30), B&amp;N posted an EBITDA loss of $163 million and a loss of $23.6 million for its fiscal Q1. Meanwhile, bn.com lost $204.6 million for the company in fiscal 2011 and lost $58.3 million for Q1.\nTo make matters worse, B&amp;N's strong gains on the digital side are the result of an unrepeatable situation in which the company's Nook Color had the market for ereader tablets to itself. What will B&amp;N do next? Reps from the company did return a call for comment, but Sarah Rotman Epps, senior analyst at Forrester Research, is among those who believe B&amp;N will soon cut the prices on both Nook products because it has to. At that point, she says, B&amp;N will have one advantage over Amazon: a big presence for Nook in its brick-and-mortar stores. Otherwise, a customer's preference for Nook is likely to hinge on loyalty to the B&amp;N brand, if anything. \nOf course, B&amp;N could also offer an out-of-left-field upgrade for Nook that could be a game-changer. So far, the only rumors that have surfaced on that topic are about a higher-end Nook Color called Acclaim that would sell for $349 in October. Could B&amp;N outflank Amazon with a more expensive tablet? The company has to offer some sort of game-changing move if it wants to avoid the fate of Borders. That's one part of the story a bookseller never wants to read: Chapter 11.\nFor Mashable's Complete Amazon Kindle &amp; Kindle Fire Coverage\n\nAmazon\u2019s Tablet Event [LIVE BLOG]\nKindle Fire Tablet Details Revealed [PIC]\nAmazon Cuts Kindle Price to $80\nAmazon Announces Kindle Touch: $149 With 3G, $99 Without\nAmazon Launches Silk Web Browser for Tablets\n Amazon Unveils First Ad for Fire [VIDEO]\nAmazon Kindle Fire: First Impressions\n\nImage courtesy of Flickr, Hey Paul"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2011/09/28/amazon-barnes-noble/>