Barnes & Noble's flawed approach to the Nook

Barnes & Noble's flawed approach to the Nook

Summary: Poor sales of the Nook tablet during the last quarter is allegedly causing executives at Barnes & Noble to rethink the company's strategy with regards to digital media. But does the company have what it takes to make the switch into licensing?

TOPICS: Tablets
(Image: Barnes & Noble)

Poor sales of the Nook tablet during the last quarter — a period that included the usually buoyant holiday season — is allegedly causing executives at book giant Barnes & Noble to rethink the company's strategy with regards to digital media.

The problem, claims a source speaking to The New York Times, is not so much the losses that the company has suffered as a result of pursuing its hardware platform, but that the lack of traction may cause the company to move away from the idea of designing and building its own tablets and ebook readers, and instead focus on licensing its content to other device makers.

"They are not completely getting out of the hardware business, but they are going to lean a lot more on the comprehensive digital catalogue of content," The New York Times sources is reported to have said.

If the report is correct, this suggests that Barnes & Noble's strategy of wading into the tablet market behind Apple, Amazon, and Google with a "me too" device was a misstep. The company was always going to have a hard time carving out a market when faced with the triple juggernauts of the iPad, Kindle Fire, and Nexus, but it seems that the Nook didn't have what it takes to survive.

There's no doubt that the Nook was a great device from a spec-sheet point of view, but what it lacked — as many commentated at the time of its release — was a real differentiator from Amazon's Kindle Fire and Google's Nexus family of tablets.

"It is a very tough space," said Sterne Agee analyst Shaw Wu. "It is highly competitive, and extras like the depth of apps are very important. But it requires funding and a lot of attention, and Barnes & Noble is competing against companies like Apple and Google, which literally have unlimited resources."

So it seems that Barnes & Noble tripped over its shoelaces with its hardware approach, but will its new digital approach fare any better? Here are just a few questions that spring to mind:

  • Will Barnes & Noble continue to make tablets and ebook readers?

  • How much of a gap will Nook's exit from the tablet market leave? What will be the competition's response to smelling blood in the water be?

  • If Barnes & Noble wants to get into the licensing content game, does it have enough original content to differentiate itself from Amazon?

  • Who is Barnes & Noble going to license content to? Samsung? Amazon? Apple? Microsoft?

Update, 12.29pm PT: This in from a Barnes & Noble spokesperson: "To be clear, we have no plans to discontinue our award-winning line of Nook products."

Topic: Tablets

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  • The Real Problem...

    Where is Borders and Kobu?

    Where will Barnes and Noble be in a few years? We just don't know...and that is what's really really hurting B&N.

    Honestly, I think people are afraid to buy a Nook and be left with a dead end unsupported device. Borders bit the big one, and we don't see B&N strategizing how not to do the same.

    We watched Circuit City die. And now we're watching Best Buy die. And what have we learned? Big box stored don't know how to adapt, and they die. Best Buy saw Circuit City's death but show me what Best Buy has done to avoid a similar fate? the past 3-4 years, Best Buy has not changed. And merely seems to be enjoying the possibility of having lost it's main competitor.

    Were I Barnes and Noble's, I'd look at alternative markets. Because a big store with lots of new books that grow old is not sustainable anymore.

    What I'd do if I was B&N's CEO? Look at Starbucks...people always need beverages. And fancy ones are often wanted.

    B&N should launch reading rooms/printing presses. Huh what? That's right. Small Starbucks styled cafes where you can read ANY of B&N's digital selections. And if you like what you're buy it to go. And then you have a choice, buy the digital copy OR a licensed print on demand version. Want it on paper. 5 minutes later you have a printed and wire bound book.

    It'd be different, and people would at least see B&N doing something to stay current with the times. And thus, not feel like they're going to die.
  • The problem is Geolocalization

    If you as an American can't use your Nook to buy news items while traveling outside the country you better buy a kindle that let you do that.

    Also, many foreign people like to buy electronical devices, but can't buy electronic books because they are not in the US, that's a shame and Barnes and Nobles is loosing market.

    Actually that's my case I live in Colombia and a have a Nook and a Kindle, and the only one I use is the latter one, because it's the platform where I can buy books.
  • Of course it hasn't helped that...

    Tech writers like AKH and many other have consistently misrepresented the Nook devices in relation especially to the Kindle. The Nook Tablet (a third generation device) was actually released at the same time as the first Kindle. So how is it that AKH can type with a straight face...
    "Barnes & Noble's strategy of wading into the tablet market behind Apple, Amazon, and Google with a "me too" device was a misstep"
    Obviously B&N was behind Apple but they were in the market before Kindle or Nexux.
    B&N shot themselves in the foot however by not taking advantage of their advantages:
    micro SD expandibility and other hardware superiority.
    Locking down their internal storage so that only B&N purchases could be stored on most of the internal memory.
    Forcing users to root their devices to gain full Android access, including the Play Store.
    I realize that their goal of "selling content" would have been compromised by different policies but it appears that they've tried to close the barn door, now that the horses have escaped. See SJVN's article
    I was an enthusiastic purchaser of a Nook tablet on release day back in 2011. I brought it back for a refund after I realized its shortcomings and especially when they blocked sideloading of apps with a software "upgrade."