Barnes and Noble released their third quarter financial results today and the numbers, as expected, were not good.
Overall revenues decreased by 8.8% from last year, and even worse, Nook revenues from both digital content and Nook hardware fell by a gut-numbing 26%. Digital content sales actually rose by 6.8%, so that really shows just how much Nook sales have fallen off over the past year. And the increase in digital sales is nothing compared to the significant increases companies like Amazon and Kobo recently reported.
The crazy thing about all this is that Barnes and Noble’s latest tablets, the Nook HD and Nook HD+, are actually really nice tablets for the price. I have an HD+ and the screen is incredible and the hardware is solid, and the Nook HD has the highest resolution screen of any 7″ tablet.
The reason they aren’t selling well is because of B&N’s insistence on locking down the software and limiting customers to just the Nook Store, which is woefully lacking in content. The selection of apps is especially horrific, and majorly limits the overall usefulness of B&N’s tablets compared to everything else on the market.
Could you imagine how many tablets B&N could sell if they ran open Android 4.2 Jelly Bean instead of B&N’s custom locked-down software? The Nook HD would instantly jump ahead of the Google Nexus 7 and Kindle Fire HD for a number of people because of the microSD card slot and higher resolution screen. Right now people don’t even consider the Nook because of the limited number of apps and restrictive software.
It’s a shame to see B&N continually running the Nook brand into the ground, but given their bullheaded approach and failure to evolve with the market it’s not surprising. B&N will likely scale back Nook hardware moving forward and restructure their entire Nook Media business, but they have no plans of abandoning the Nook as some websites were reporting this past week. Instead B&N will run more sales and promotions to increase sales.
In fact B&N is already offering a new deal on both the Nook HD and Nook HD+ where they are giving away a $25 credit with the HD and a $50 credit with the HD+ to spend on Nook content—ebooks, apps, movies, etc.
I wonder how the decrease in sales is going to affect the release of E Ink Nooks moving forward. B&N usually releases a new E Ink Nook in the spring, and the GlowLight Nook Touch is in major need of an upgrade, given the fact its frontlight and text contrast are inferior to the Kindle Paperwhite and Kobo Glo.
Hi Nathan, I live close to Best Buy and Staples and the Nook HDt and HD didn`t sell out most liked at Kindle Fire HD or the Samsung galaxy tab 2 10 or Samsung galaxy 270 , And Acer tablet.
I’ve been using the 32 gig N2A card (current version is 4.2 Jelly Bean) in my Nook Color…which makes it in effect a very nice Android Tablet. An N2A card is available for both the Nook HD and HD+. I can only imagine how nice those tablets are, with the superior resolution and faster processor than my two year old Nook Color.
I heartily agree. I’ve liked the look, feel and specs of the Nooks since the first Nook was released but have always been put off by the locked down operating system. My first 7″ tablet was the Kindle Fire because it was move amenable to other aps. I now have a Nexus 7 which is a great Android tablet and a iPad mini. The Nexus is a great tablet while the mini integrates seamlessly with my Mac, iPhone and iPad 3. If the Nook wasn’t locked down, I would buy one for it’s screen and memory card slot.
Well, they also could make a eink tablet – only thing I miss on my Nook Simple Touch is a fully functional 4.x rom, as the provided one sucks in many many ways, and it is 2.1
I would really love to have a eink device capable of running some modern android apps. Still, if they don’t do it for their tablets then ebook reader doesnt have any chance…
I hope B&N still releases an upgrade for the Nook Glow. It needs a better frontlight that doesn’t degrade contrast so much and a higher resolution screen.
I do too. I’m still not convinced by the Kindle PaperWhite, the Kobo Glow or the Bookeen HD and for many different reasons. If only the Nook Glow can have as you said better frontlight that would at least make the fonts display be on par with the (original) NST, or may be equipped with a different technology such as LED Flex Lighting, I’d be soooooo happy. (Fingers and toes crossed that Nook’s engineers/developers are reading this blog).
A major factor here was not ‘magic feature 42’ but just bad execution and marketing/sales.
First, B&N invoked the Osborne Effect on their Nooks for a 1/3 of the whole Quarter. Prominent at every physical BN location was a video touting how amazing the upcoming HD models were and they were not for sale. Why buy a Nook tablet or Color why the store is also telling you they are obsolete? That will depress sales. If a vendor is going to announce it, ship it. Waiting over a month is only going to cause problems if do not have tight inventories and high differentiation. BN has neither.
Contrast to that to the year earlier when BN announced around Nov 7 and shipped about two weeks later. [ There is still a problem with launching so late. But don’t “solve” that by moving the announce date earlier. ]
Second, The SD Card slot actually probably contributes to the suppressed app quantity at the Nook Store. The number of folks who constantly run apps on a Cyanogenmod distro of Android are not going to show up on any marketing intel info as being Nook users. So why port if fewer folks are running Nook’s flavor. It is simpler for the developers to make the users do the “porting” work.
Third, frankly being “fully Android” isn’t saving the Kobo Arc in locations outside the US.
The fact is that there are several vendors in the more affordable android space. If selling an ‘at cost’ tablet against their ‘for profit’ tablet you will be in long term trouble unless selling some content to make up the gap somehow.
Fourth, the iPad mini basically neutralize Amazon and BN ‘larger than 7″‘ models.
http://www.displaysearchblog.com/2013/02/smaller-tablet-pcs-to-take-over-in-2013/
The 9.0″ and 8.9″ categories? Dismally small. BN has got the wrong product mix. Amazon kept their “more affordable” 7 inch model. BN didn’t. The direct frontal assault on the iPad didn’t do anything for either one of those two. At least this year.
If BN had spent more resources on making the Glow being more competitive in price/technology along with better and broader 7″ offerings they would probably be in better shape now.
Similarly the video service thing is likely a huge distraction consuming resources. Netflix has years longer lead time in the market. Hulu is backed by content providers. Apple has buckets of money. Amazon frankly runs some of the infrastructure that a few of those others use. Tiny Nook is going wants to take them on too? Find a partner who might let you do some revenue sharing. Or Automatic Ultraviolet or “Music Match” on Blu-Ray or CD sales in store.
“… Digital content sales actually rose by 6.8%, so that really shows just how much Nook sales have fallen off over the past year. …”
That more so shows just how far off where they should be Nook is. For long term success Nook has to be a content/goods selling business, not a tablet hardware seller.
There is Nook for iOS, OS X, Windows (various flavors) , etc. also. The tablet affords the better experience but it can’t be the only experience for them to be successful long term.
In the Amazon model of selling the hardware viewer at cost you actually do *NOT* want the no margin hardware to be growing faster than the content sales. That actually would be a bad sign!!! That will send the overall corporate profit margin down to close to zero. That isn’t going to do anything positive for the stock price.
Hey there!
If you were in my shoes and you had only $80 to spend on an ereader, would you choose the Kobo Mini, or the Nook Simple Touch? I’m really not into rooting, so I guess I’m just Interested in finding out which of these 2 devices has the best epub reading experience. Thanks!
Oh, that’s a toughie. Normally I’d suggest going to some place like Best Buy and testing them out side-by-side and letting the ereader pick you, but it might be pretty hard finding a Kobo Mini at a store. Personally I’m a little more fond of the Nook, but that’s in part because I have it rooted, and I also like the buttons. But the Kobo Mini has more going for it from a software standpoint compared to a non-rooted Nook.