What does the Samsung-Nook deal mean for Microsoft?

What does the Samsung-Nook deal mean for Microsoft?

Summary: Microsoft's investment partner Nook Media is working with Samsung on a new Android-based Nook tablet. Is there still a place for Microsoft in this arrangement?

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We'd already heard there would be no Wook (Windows-based Nook e-reader). But instead, there's going to be a new Android-based Samsung Galaxy Nook tablet coming to market this summer.

samsungnook

Given Redmond's $300 million investment in Nook Media, Microsoft now has a stake (albeit, an indirect one in this case) in yet another Android platform. (Its first was the Nokia X Android phone line.)

For the old Microsoft, this would be a problem. But for the new cross-platform-focused Microsoft, I bet it's much less so.

Microsoft has launched Android versions of a number of its applications and services, including an Android version of OneNote, Office Mobile for Android phones and OneDrive cloud-storage client for Android. Microsoft is in the midst of developing a touch-first Office suite for Android tablets, which it is expected to field ahead of the Windows version.

Microsoft also is building a "consumer reader" app, which may or may not be branded Xbox Reader. It is believed to be doing this in conjunction with Nook.

In April 2012, Microsoft invested $300 million in a new Barnes & Noble subsidiary, initially known as Newco, and later renamed "Nook Media." Nook Media is the part of B&N that made Nook readers and also included the digital/College businesses from Barnes & Noble. The agreement was part of an Android patent-settlement dispute between Microsoft and Barnes & Noble.

At the time of that announcement, it seemed a Nook Windows Phone app was definitely going to figure in a big way. But as of March 2014, Nook got the rights to discontinue work on its Windows 8 reading app and to cease development on a Windows Phone 8 version. Going forward, the pair would be focusing primarily on digital content.

Will the coming Microsoft-Nook reader end up on these new Android-based Samsung Galaxy Nook tablets -- at least as a downloadable option? These days, I'd say that possibility isn't as crazy as it might have once seemed....

Topics: Mobility, Android, Microsoft, Mobile OS, Samsung, Tablets, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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26 comments
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  • Book Store

    Beyond the IP settlement, I suspect the goal of MS is to secure books for the MS Store or for Xbox. Apple and others already have them in their ecosystems.
    Jgarrettca1
    • I agree

      I've been wondering about why this wouldn't be an obvious move for Microsoft. I can't imagine it would be easy for any company to open an e-bookstore from scratch these days, and it seems like a partnership or takeover of Nook would be the perfect way for Microsoft to get into this market.

      I still think Kindle Paperwhite is the ultimate way to read anything you'll read from cover to cover (not so much something where you're searching for specific content, like tech books). But a lot of people carry tablets and don't want to pack a standalone e-book reader, and Microsoft leaves themselves out of this market. I wonder why.
      dbnick
      • Book Quality

        Taking some graduate courses I am surprised at the poor quality of many Kindle books. I have seen several nice color books that are rendered on the Kindle in shades of grey. Also I have seen paper books in later printings that had corrections done that were not on the Kindle. Some Wiley text books are not available as either Kindle or PDF and use a semi-proprietary reader that has copy protection. Nook is even another copy protection system. In general the quality of e-text books is very rocky.
        MichaelInMA
        • Agreed

          After many years gap, I've got back into reading bad science fiction. I use an Android tablet, and prefer the Play Book reader to the Kindle app, mostly because I prefer the fonts and I find the margins too large for my taste in Kindle. Unfortunately I've found quite a few books in Play to have missing punctuation (e.g. he'll -> hell) which is annoying. I've looked at a few chapter one previews and the problem is specific to Play.
          DJL64
  • Poor old M$

    Can hardly move for elephants in the room.

    One of these days, they'll come clean and admit they stand to make much more money adopting Android than they ever did opposing it - patent fees included.

    They could even [shock! horror!] take a leaf out of Samsung's Tizen/Android book and stop denying the future is Windows/Android.

    It'll upset the fanbois - but hey, what doesn't, these days?
    Heenan73
    • this

      Actually reinforces a Windows/Android more than anything... When will haters realise their futility?
      aesonaus
  • What does the Samsung-Nook deal mean for Microsoft?

    It means double pay day for Microsoft. Royalties from android then royalties from the reader app.
    Loverock.Davidson
    • MS gets no royalties from android.

      I want to see a public disclosure of specifically how much. Not just some general "licensing revenue" figure in a quarterly report. They don't need to disclose the specifics of the deals or the patents. Until then, they make nothing from android.
      drwong
      • your still on about this

        They make around the billion dollar a year figure from it.

        Why should they release the details of a confidential agreement?

        Live it - your not important enough for a major corporation to change their financial reporting to a level of detail sufficient for you. End of story.
        aesonaus
        • well at least we know MS is paying billions to license

          patents too. It just that other companies don't blow their big horn every time they get MS to pay for a patent license.
          drwong
          • and neither does MS

            Don't mistake article commenters continually commenting with MS.

            Each time a deal is signed there is at most a 'quiet' announcement of another patent deal being signed with company x and that the terms are confidential, no banging on the drum about anything.

            And as for what they pay - I don't recall seeing anything about it but given media codecs etc I'm sure they do.

            They whole thing just ends up as one big game of monopoly money between the vendors (guess it helps with shifting profits between countries)
            aesonaus
        • It must be a little bit more

          Android is going to sell around 1 billion units, that would give $1 per device.
          I suppose the number is around $3 or $4 per device. Obviously the net profit is smaller and considering the cost of lost opportunities, android costs billions and billions to Microsoft.
          AleMartin
      • They don't?

        I'm pretty sure they do. If you are that interested in knowing how much Microsoft is making from android you can create your own version of it then strike a deal with Microsoft. That will give you all the info you need to know.
        Loverock.Davidson
        • No, they don't.

          There are hundreds of licenses MS has to pay that are not trumpeted. Some are paid because a court forced them to...
          Some are paid through cross licensing.

          And making a deal will not provide any information other than the deal made.
          jessepollard
    • Royalties from android then royalties from the reader app.

      That's true, though Nook's market share is so small, M$ won't recoup their investment until 2308 - if ever. Of course the "Android patent" payments will have long run out by then - it it next year they exipre, or 2017?
      Heenan73
      • You should call Microsoft...

        You seem to know a lot that Microsoft's enormous teams of investment professionals don't.

        It's clear that a multi-billion dollar corporation like MS would be wise to take financial advice from a guy like you... I mean, you probably have amassed well over $1200 using your own keen fiscal skills.
        ribzilla
      • If then

        As I recall, B&N refused to sign the NDA when MS wanted royalties for Nook, then called out the patents in their countersuit as frivolous. Go check the archives at Groklaw. The end result was MS investing into Nook and B&N's campus-bookstore division and both sides dropping their cases. I question whether *any* money came or will come from B&N.
        rkhalloran
  • Amazon

    At this point does it really matter much given Amazons dominance in this particular market?

    Microsoft will be happy with the money they make from the deal and in the meantime already have a fully functioning Kindle App on both Windows 8 and WP so it really doesn't make much sense for them to put much effort in here.
    aesonaus
  • What's next? Xbox games on PS4s? Mary Jo becoming an Android blogger?

    I feel like Paul Atreides in one of those valleys where the spice-sight fails and all futures become uncertain ...
    daboochmeister
  • Any new Nook e-ink reader in the works?

    Looks like the Samsung tab would be color, etc. Will there also be an upgrade to the Nook e-ink reader? I have the latest model of that with the built-in light, and really like it.
    Userama