Barnes & Noble announced Tuesday that it would stop manufacturing the Nook, its Android-based tablet product, as a part of its fourth-quarter earnings report.
Amazon's Kindle was a hit, and despite more capabilities and an aggressive pricepoint, the Nook was an also-ran. The Nook division took in $768 million in revenue in the past year, a decrease of 36 percent over the year before, and not enough to turn a profit.
The company lost $475 million in the last year on the division. Ouch!
Barnes & Noble Inc. had been pouring money into developing its Nook devices to keep up with changing reading habits and beat back competition from retailers such as Amazon, which makes the popular Kindle readers.
It hasn't worked. According to research firm IDC, Barnes & Noble's tablet shipments fell to 1 million in the fourth quarter, down from 1.4 million a year earlier. At the same time, sales of Kindle e-readers have kept growing.
Many point to the earnings call on Barnes & Noble College.
It's the bright spot in the Barnes & Noble family. Unfortunately, you can't count on that segment to flourish, and I will explain why.
How long do you think it will take before the majority of schools are using tablets instead of books?
The transformation is already beginning.
There should be no question in your mind that digital books cost less. No shipping, distribution, printing, or binding is required, and Barnes & Noble is part of distribution.
The way content is delivered is changing, and the half-life of physical paper books is probably not much more than five years.
Why buy a physical copy of a college book for $125 when you can buy the same text in digital form for $70? I'm sure some will prefer the paper version regardless of cost, but isn't a model you want to invest in.
Do you believe Barnes & Noble is a lost cause?
Do you enjoy going into one and just browsing?
Did you buy a Nook?
If so, what do you think of B & N's latest actions?
Brick and motar stores spur digital purchases by customers spotting books on the shelves they would have never thought of buying before seeing it with their own eyes.
Now will the demise of physical bookstores slow the digital book sales?
What do you think?