[gyardley]

B&N simply cannot afford (financially) to take a loss on the hardware.

They're doing this already. People with Nooks make follow-on purchases too.

Over the past couple of years, I've seen B&N upgrade their tech and product teams and lay the groundwork for a future where they - like Amazon - have no physical locations but offer far more than books over the web, and make much of their money through the sale of digital goods.

I'm skeptical they'll catch up with Amazon, but when the actual physical bookstore is a quaint and obscure relic, I think they'll still be trucking along quite nicely. The company's already massively undervalued given their share of the ebook market.