Is Barnes
& Noble’s Nook losing the e-reader wars to Amazon’s Kindle franchise?
In a holiday sales statement issued Jan. 5, the
bookseller suggested it would absorb deeper-than-expected losses over the
course of its fiscal year. “The change in guidance is due primarily to a
shortfall in the expected sales of Nook Simple Touch, as well as additional
investments in growing the Nook business,” it read, “such as advertising to
support new products and international expansion in the back half of the year.”
Overall, Nook
unit sales increased 70 percent year-over-year, with sales of the full-color
Nook Tablet apparently exceeding expectations.
Moreover,
Barnes & Noble is considering a spin-off of that Nook business, although it
cautioned in the statement that “there is no timetable for the review, and the
Company does not intend to comment further regarding the review.” Discussions
about expanding the Nook’s presence into international markets are apparently
under way with unnamed publishers, retailers and technology companies.
Contrast that
with a December statement from Amazon, in which the online retailer claimed
sales of its Kindle devices had topped 1 million per week. “We’ve already sold
millions of units, and we’re building millions more to meet the high demand,”
Dave Limp, vice president of Amazon Kindle, wrote in a Dec. 15 statement.
“Kindle Fire sales increased week-over-week for each of the past three weeks.”
If sales of
Amazon’s gray-scale Kindle e-reader have softened in recent months, the company
has so far declined to reveal that in any sort of public statement. Over the
holidays, Amazon claimed, the Kindle Fire became the top-selling and
most-gifted product in its store, while sales of Kindle books between Black
Friday and Christmas Day rose 175 percent year-over-year.
Whether the
Kindle Fire or the Nook Tablet, it seems that customers are interested in
cheaper, full-color Android tablets designed primarily for e-reading and other
media content. Based on its public statements, though, it seems that Barnes
& Noble is wrestling with the costs and effort necessary to present a
viable alternative to Amazon in the space. Does that mean the Nook franchise is
doomed? Not necessarily. But the battle with Amazon—which, thanks to its
broader array of businesses and large market capitalization, can indulge even
in those projects that burn enormous sums of money for many years—could soon
force the bookseller to make some fairly radical moves.
If Barnes
& Noble decides to split off its Nook business, who would buy it? Is Google
in the mood to further challenge Amazon and Apple for e-reader supremacy?
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