Thursday, February 27, 2014

Barnes & Noble's revenue from Nook plummets by 50%, but they're planning a new one anyway

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Barnes & Noble is in a tough spot. Their book selling business, anchored by a nationwide chain of massive and expensive stores, isn't doing well in the face of digital competition. Their effort to jump into the digital realm themselves, first with the Nook e-reader and then Android-powered Nook tablets, did well for a while and has since floundered. In the last quarter, Barnes & Noble's Nook division (encompassing devices, digital content, and accessories) saw revenues of $157 million — down 50.4% from the year prior. Device sales made up two thirds of that revenue, and even with an increased userbase, Nook saw a drop of 26.5% in digital content sales. That's revenue, though. Losses in the Nook division topped $129 million, a 67.5% increase from last year.

That Barnes & Noble didn't release a single new Nook tablet over the past year might have something to do with that, though they admit that their plan was to sell through a glut of existing device inventory. And seeing these numbers, we'd have thought that the Nook tablet (and eventually Barnes & Noble) was done for this world. But it's not so, said Barnes & Noble CEO Michael P. Huseby:

"We remain committed to delivering world-class reading experiences to our customers through our reading centric e-Ink and color reading devices. Barnes & Noble is actively engaged in discussions with several world-class hardware partners related to device development as well as content packaging and distribution. As a result, we plan to launch a new NOOK color device in early fiscal 2015."

So Nook isn't dead, nor is Barnes & Noble, at least not yet. We generally liked the previous Nook tablets — they offered a decent bang for your buck — but it's hard to say how they'll be able to compete against today's budget offerings, both from Google and a more direct competitor like Amazon. Let us know in the comments if a new Nook tablet interests you.

Source: Barnes & Noble