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Amazon pushes Barnes & Noble's back to the wall

Amazon introduced its long expected Kindle Fire tablet on Wednesday, as well as a touchscreen device and a cheaper version of its basic Kindle e-reader.

Those items are less expensive than their counterparts in Barnes & Noble's series of Nook devices and have the added benefit of giving consumers access to Amazon's cloud computing and entertainment services.

Barnes & Noble shares closed down 6.8 percent after falling as much as 13.3 percent earlier.

"It hurts them a lot more than it does Apple because they're so reliant on the Nook," said Michael Souers, an analyst with S&P Equity Research, forecasting lower Nook prices. "They need to maintain market share, which means their profitability is going to decline."

Barnes & Noble, which is facing an industry-wide decline in book sales, has gotten some relief from its Nook, launched in 2009 about two years after the first Kindle came on the market.

Last month, Barnes & Noble forecast sales of its Nook devices and e-books would double this year and reach $1.8 billion, or nearly a quarter of its revenue, even as its same-store sales stagnate.

Forrester Research estimates Barnes & Noble has a fifth of the e-book and e-reader market, compared with Amazon's 60 percent.

Barnes & Noble, which forecast a loss for the current fiscal year, suspended its dividend in February to hoard more money to invest in Nook.