Dr. P.V. Viswanath
Barnes & Noble Tablets Aim for Niche Below iPad
By Julie Bosman, The New York Times, September 26, 2012
Barnes & Noble, the nation’s largest bookstore chain, also said its Nook devices would be sold in hundreds of electronics stores and supermarkets across Britain as it tried to establish a foothold overseas.
The new devices are a seven-inch tablet for $199, called the Nook HD, and a nine-inch tablet for $269, the Nook HD Plus. Company executives promoted them as being lighter and faster than comparable tablets, a market that is crowded with competitors from Apple, Amazon and Google.
The nine-inch tablet, Barnes & Noble’s first device of that size, is a product aimed at the lower end of a market dominated by Apple’s iPad. The newest iPad starts at $499.
“We think there’s a space in the market below the iPad for a larger-format tablet that’s half the price,” William J. Lynch, the chief executive of Barnes & Noble, said in an interview on Tuesday. “So we’re not trying to go head-to-head with the iPad. We think that product does what it does well. What we’re trying to do is fill the gap of delivering an exceptional media tablet that’s much more affordable.”
Both new tablets will go on sale online on Wednesday and arrive in stores in early November. In Britain, preorders for the new devices will begin in October. Mr. Lynch predicted that the company would sell “millions” of the tablets, though analysts said Amazon, the giant online retailer, would most likely retain an advantage because of its sheer size and support system.
“If this decision for consumers was just about devices, then Barnes & Noble would be pulling ahead,” said James McQuivey, a media analyst at Forrester Research. “These are better devices than what Amazon has announced, and they’re comparably priced. Amazon just has a much bigger service offering to go behind their device.”
Barnes & Noble, which introduced its first black-and-white Nook e-reader in 2009, has focused heavily on its digital offerings to compete with retailers like Amazon and Apple. In April, it was buoyed by Microsoft’s announcement that it would invest hundreds of millions of dollars in the bookseller’s digital division.
By releasing the new devices over the fall season and holidays, Barnes & Noble can take advantage of the biggest time of year in the publishing industry and a period that traditionally produces high traffic in the company’s nearly 700 bookstores.
Barnes & Noble will also add to its digital content with Nook Video, a new service that will allow customers to stream and download movies and television shows for a fee onto TVs and mobile devices, while storing the content online. Through deals with entertainment companies like Disney, Viacom and Warner Brothers, Barnes & Noble will offer a video catalog that includes HBO shows like “Game of Thrones” and “True Blood,” and movies including “The Artist” and “Toy Story 3.”
The company said the new service would be available for Nook devices, TVs, computers and smartphones on free Nook video apps that would be introduced soon,
Barnes & Noble’s Nook video plan would be similar to Apple’s iTunes, allowing viewers access to single episodes, movies or whole TV seasons. The market for streaming services has become crowded in recent years. In addition to Apple and Amazon, Walmart entered the streaming business in 2010 with its $100 million acquisition of Vudu, which allows viewers to rent high-definition movies on Internet-enabled televisions. Many new television sets now come with the Vudu and Netflix apps built in. Verizon and Redbox recently introduced their own joint streaming service.
Major studios have lost home video revenue in recent years as DVD sales and traditional rentals decline. Deals like the one with Barnes & Noble help bring in additional revenue and offer viewers another outlet to find content.
Barnes & Noble has about 25 percent of the e-book market. In August, the company reported a loss of $41 million, or 78 cents a share, in the quarter that ended July 28. Nook sales were flat over the previous year, at $192 million.
On Tuesday, Barnes & Noble signaled its intention to build a bigger presence in Britain. It announced partnerships with several retailers, including the company Dixons Retail, which owns the electronics retailers PC World and Currys, and Sainsbury’s and Waitrose, two popular supermarket chains.
Barnes & Noble also named Patrick Rouvillois as a managing director responsible for building the Nook brand outside the United States.
Amy Chozick contributed reporting.