Business Insider reports that Barnes and Noble has laid off its Nook hardware engineering team in a drastic effort to return the product and the company to some semblance of a competitive position in the ereader/tablet market. B&N confirmed layoffs but declined to comment on their nature.
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Back in 2012 Barnes and Noble introduced built-in frontlighting to the ereader
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Bargain hunting? Good, because Barnes & Noble has just hacked down the price of its Nook HD range in the UK. The 7-inch Nook HD will now set you back just £79 for the 8GB edition and £99 for the 16GB version, while the 9-inch HD+ is now available for £129 (16GB) or £149 (32GB). We’re not sure if this is a Touchpad-style fire sale or if the bookseller is prepping for its traditional autumn refresh (albeit with a third-party tablet this time ’round) — but either way, the Nook is a great piece of hardware for under a ton.
Filed under: Tablets
Two months after announcing that it would cut back
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After a U.S. District Court judged found Apple guilty
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Each week Ross Rubin contributes Switched On, a column about consumer technology.
The recent announcement by Barnes & Noble that it would discontinue its Nook tablets marked the exit of what once promised to be a strong rival to Amazon, at least among bibliophiles. Barnes & Noble’s entry into the tablet market took place amidst an annual game of leapfrog with its internet-based rival. Surviving for three iterations, the color Nook devices were products that had a particular focus on media consumption — especially reading — and eschewed open access to apps.
Filed under: Tablets
The Nook is on life support. Device sales are down. Digital content sales are down. Revenue is down. Things look bleak, but B&N plans to keep its current crop of tablets around at least through 2013.
Today in its 2013 year-end report, Barnes & Noble detailed the sad state of the Nook but said it will continue offering the Nook HD and Nook HD+ through the holidays. The company will also continue to support the devices in retail stores. However, things are about to change dramatically with the Nook brand.
B&N briefly detailed an upcoming licensing deal that’s designed to “significantly reduce losses in the NOOK segment by limiting risks associated with manufacturing”. According to the news release today, B&N is teaming up with a yet-to-be announced 3rd party that will manufacture the Nook tablets, which will then be co-branded with B&N and the 3rd party.
“Our Retail and College businesses delivered strong financial performances in fiscal year 2013,” said William Lynch, Chief Executive Officer of Barnes & Noble, said in a released statement today. “We are taking big steps to reduce the losses in the NOOK segment, as we move to a partner-centric model in tablets and reduce overhead costs. We plan to continue to innovate in the single purpose black-and-white eReader category, and the underpinning of our strategy remains the same today as it has since we first entered the digital market, which is to offer customers any digital book, magazine or newspaper, on any device.”
The Kindle’s success clearly states that consumers want e-book readers, and despite B&N’s huge retail footprint, the company’s early success in the segment didn’t translate to a long-term win. It’s clear, with a year of declining sales data, the bookseller isn’t offering a product that interests its customers.
Barnes & Noble reported its fiscal fourth quarter earnings this morning, and the financials make it clear that the company is still struggling to figure out how it fits into the larger digital reading ecosystem. All told, BN reported a quarterly net loss of $118.6 million (compared to $56.9 million from the year ago quarter) which works out to a loss of $2.11 per share on $1.3 billion in revenue.
Analysts weren’t expecting much going into this quarter (and BN’s own anemic guidance from Q3 didn’t inspire much confidence): the consensus according to Bloomberg was for the company to report a loss of $0.96 per share on $1.3 billion in revenue. They also predicted a 4% drop in annual revenue for the company, which was just about right on the money — the company reported $6.8 billion in revenue for fiscal 2013, as well as a corresponding loss of $154.8 million.
Ouch.
BN’s retail business didn’t look too hot this time around, as quarterly revenue was down 10% year-over-year to $948 million (though the company cites the strength of series like Hunger Games and Fifty Shades of Grey as inflating last year’s numbers). That may not be BN’s problem for too much longer though, as company founder Leonaro Riggio started openly opining on the notion of buying back the company’s 689 brick-and-mortar stores (not to mention bn.com) back in February. Should the transaction eventually come to pass — which is by no means a given — Barnes & Noble will effectively be left with its Nook Media business.
Meanwhile, Nook Media (which BN owns 78% of after you factor in Microsoft and Pearson’s stakes) continues to look like a real stinker this quarter. It reported a relatively scant $108 million in quarterly revenue, which represents a staggering 34% drop from the year-ago quarter.
The intensity of that dip is surprising, but not to some — some analysts have pegged the sales slump on the fact that Nook tablets lacked the productivity acumen and app access to compete with other low-cost devices. Barnes & Noble finally managed to fix that this past May by striking a deal with Google to fold Google Play Store access and a few stock Android applications like Gmail and Chrome into Nook tablets, while simultaneously trying to jump-start Nook sales by announcing slashed nook prices put in place for Fathers’ Day will stay in effect for the foreseeable future.
What is new is that Barnes and Noble is looking to open up the Nook brand to other OEMs itching to make their own tablets. The company will continue to offer its own first-party e-readers like the Simple Touch series as time goes on, but in a bid to minimize the risk inherent to churning out tablets in a crowded market, BN is leaving that work to third-party manufacturers. There’s no word yet on exactly when the company will officially kick off its so-called partnership program (though I suspect they’re already in talks with some OEMs), but it seems likely that the existing Nook HD and HD+ will be the last to bear BN’s fingerprints. Don’t expect them to disappear completely just yet though — they’ll be around at least through the holidays.
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