Barnes & Noble’s Co-Branded Tablet May Just Be a Way Out of the Market
By Ben Brody
Barnes & Noble wishes its Nook were the Kindle. Even indifferent reviews haven’t stopped the Amazon Kindle Voyage from being the hottest selling e-reader this holiday season. For all it’s tried, Barnes & Noble’s Nook continues to struggle with the e-reader community. But now the book store giant is teaming with Samsung to double down on the Nook niche.
The company, which owns the Nook e-reader brand, joined with the Korean electronics maker to introduce a 10.1-inch version of the co-branded Samsung Galaxy Tab 4 Nook tablet on Oct. 22.
Many industry watchers say the new product offers little that is new — or expensive to develop — and is mostly just helping Barnes & Noble reduce its losses in the tablet market.
“It’s as good a solution as you can find to an unfortunate problem that they were faced with,” said James McQuivey, a media analyst at Forrester Research.
The new tablet will sell for $300 and will include $200 to use on content at the Nook store, which offers books, newspapers and magazines. The content that is presumably meant to draw potential customers to the flagging Nook brand. The device joins a 7-inch version of the tablet with which the two companies launched their partnership on Aug. 22.
Barnes & Noble, by all accounts, has had a tough time in the tablet and e-reader markets: The first few generations of Nook, which first hit the market in 2009, received positive reviews. Wired wrote that those purchasing the rival Kindle were “in for a giant dose of buyer’s remorse,” and the device seemed to position the brick-and-mortar store as an electronics player.
But, according to McQuivey, the initial adopters didn’t move up to later-generation Nooks; they simply moved over to Apple — or, in many cases, Samsung. Barnes & Noble got stuck with inventory, and the segment became such a drag on the company’s bottom line that then-CEO William Lynch resigned.
Nook sales have been steadily decreasing since the segment made $316 million in sales in early 2013.
There was at least one other co-branding effort aimed at rescuing Barnes & Noble from the big development costs of making its own e-reader: Microsoft took a hefty share in Nook and was developing a specialized app that would be native to Microsoft tablets. There were also rumors the tech giant would buy Nook outright. The two companies essentially dissolved the idea in March, however.
Soon after, in June, Barnes & Noble announced the Samsung partnership (as well as its intention to spin-off of the Nook segment).
Reviews for the resulting tablets have ranged from neutral to barbed.
“It’s hard to look at the Samsung Galaxy Tab 4 Nook and not think of it as a sort of surrender,” tech siteMashable wrote.
Gizmodo echoed others in maintaining that the device “is simply a Samsung Galaxy Tab 4 … with some proprietary Barnes and Noble software installed.”
That might, however, be the good news, analysts say. The reason is that it appears that Barnes & Noble didn’t sink enough money into the partnership to be in danger of a big loss.
“The risk is minimal,” said Jean Philippe Bouchard, research director for tablets at market intelligence firm IDC. “You’re using something that you know works.”
He said he believes there are Barnes & Noble loyalists who may be interested in the product, but most casual users will probably stick to the free Nook app, using it mostly on cheaper tablets.
