Barnes & Noble's Nook started out well as an early Android-powered e-reader/tablet. Since then, however, the Nook has fallen behind other low-priced Android tablets, such as Google's Nexus 7 and arch-rival Amazon's Kindle Fire. In an attempt to make itself more competitive, Barnes & Noble is incorporating Google Store and its full Android application support into a new software update for its top-of-the-line Nook HD and HD+ tablets.
Until now, the Nook had only a comparatively small application store. With this 2.1 software update, Nook HD+ users will have access to the full Google Play Store software library of 700,000 apps. In addition, they'll be able to buy and play music from Google Music, videos, and even ebooks. Yes, that means you'll be able to buy apps, books, and movies from either the Nook Store or the Google Play Store.
B&N is making this radical move for a very simple reason: It needs to reclaim its vanishing market share. According to IDC's first-quarter tablet market numbers, the Nook has fallen out of the top five tablets, with Amazon now claiming the third spot.
CEO William Lynch explained that consumers want all-purpose tablets, not simple e-readers. "We saw coming off holiday, the market moved to multifunction tablets. Consumer research showed us the breadth of applications available is really critical." Of course, some people saw the death of all but the cheapest dedicated e-reader years ago.
Another reason why Barnes & Noble is making this move, as Sterne Agee analyst Shaw Wu speculated in February, is because in the highly competitive tablet market, where "extras like the depth of apps are very important", B&N didn't have the funding and expertise needed to compete "against companies like Apple and Google, which literally have unlimited resources".
The bottom line is that Barnes & Noble was losing money on the Nook. Lynch also said, during the February earnings call, "Partnerships are one of the key strategies for growth for our Nook digital content business, and we are encouraged by the status and breadth of discussions we're in the midst of. Even with the decline in Nook unit sales in Q3, we grew digital content sales 7 percent, so we've demonstrated we can grow our content business without having to grow hardware sales." This software update clearly shows that going forward, B&N is partnering with Google.
At one time, it appeared that Barnes & Noble was going to partner with Microsoft and create a Windows 8-powered Nook. This move appears to have come to nothing except for a much-needed $300-million investment in B&N by Microsoft. What Microsoft is getting out of this deal is difficult to see.
As for Nook users, you can either wait for the update, which will be automatically downloaded to devices that are registered and connected to wi-fi, beginning on May 3, or download it manually. If you elect to do it yourself, you have two options.
The more difficult way is to download the update to your Windows PC or Mac and then flash your 7-inch Nook HD or 10-inch Nook HD+ over a USB connection. It's easier to simply connect your Nook to a wi-fi hotspot, tap the Settings icon in the Status bar at the top of your screen, tap on All Settings, then tap on Device Information, and check to see that your software version matches the number at the top of this page. If it doesn't, tap on Software version and then tap on the Check for updates button. Be sure to follow the on-screen instructions, and do not turn-off your Nook while it's downloading or installing the update. This update is not available for the Nook Tablet or other earlier models.
Will this update work for Barnes & Noble? It's too early to say. It will, however, clearly work for Nook HD and HD+ users who want to get the most from their e-readers/tablets.